Balancing the Old and the New
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What led to your interest in startups?
I hail from one of India’s premier business families. The family environment was a natural catalyst, drawing me toward businesses, their creation and creating value for not just business stakeholders but also for society. There is no particular moment that led me on the path that I took but in today’s environment startups are the ones coming up with great ideas for this age. That is why I want to back them, not just with money but also mentoring.
How many and what kind of startups are you looking to invest in?
Ideally, my ticket size for investment would be between $2-4 million per startup. However, it is not the number of startups that I invest in which is important but the quality, uniqueness and earning capacity of the business. For the time being I have set aside Rs 100 crore and I am focusing mainly on lifestyle, F&B, healthcare, media and entertainment.
Is there a time period by when this fund would be invested in the startups?
Again, no. I don't want to rush the investments. I'd rather have careful due diligence and invest better.
What are your selection criteria for choosing a startup to invest in?
I am looking for companies with strong commitment, which have sustained profitable growth, and they should have a good understanding of the business model and understanding of future trends. The model should rest on a deep understanding of the business and deliver positive social impact.
After the Rs 100 crore fund is put to use to invest in startups, would you further go out and raise funds to put these startups into a selfsustaining mode? Or continue using your own proprietary capital?
I am primarily investing in startups, which are cash positive, and their cash needs for next two to three years hopefully would be taken care by the funds I have earmarked. However, if needs arise I'd be open to raising funds to put the business on a self-sustaining mode.
Apart from money, what other support can a startup expect from JK International?
The experience I bring on the table due to 20 years of managing various businesses in my family company Raymond, has taught me a lot. The same would help me mentor and nurture the startups, additionally it will be a learning experience for me as well. I follow the mantra of ‘invest and intensify’. I do not intend to only invest and wait for investments to appreciate, but also use my own experience to help the business grow larger to build a professional team, implement better processes, strengthen use of technology and to infuse transparency in the system so that the business can strive ceaselessly for growth and efficiency.
What according to you would be the challenges faced by the upcoming startups in healthcare and F&B industries?
There is room for everyone. The Indian market is big. For startups of any kind, the biggest challenge that I see is access to capital, management system and people. Do you think there is a need for an established businessman like you to support the emerging startups? Certainly, it makes sense for people like me to do so. And I believe that is happening. Not everyone is talking about their investments but many like me are supporting exciting startups.
(This article was first published in the January 2019 issue of Entrepreneur Magazine. To subscribe, click here)