Mariwalas Looking at Start-ups to Broaden Investment Portfolio
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Sharrp Ventures, the Harsh Mariwala family office, is creating an additional pool of wealth for the Mariwala family beyond Marico and Kaya by investing in start-ups. “Until about five years ago, our family was investing surplus funds in acquiring further shares in Marico. At that time, I proposed setting up the family office to create an investment portfolio beyond Marico and Kaya,” Rishabh Mariwala, Director, Sharrp Ventures, told Entrepreneur India in an interview.
The family office fund has pooled money in venture capitalist (VC) funds along with directly investing into start-ups, creating a portfolio of about 20 companies in five years.
Sharrp Ventures takes a long-term view with their investments and do not have a fixed exit strategy. “We do not have exit compulsions and can stay invested till investee companies reach IPO or are attractive for M&A opportunities,” Mariwala explained. “As a family office, I do not have to face the pressure of running a fund, so we are in no hurry to invest or to exit when there is value still left on the table.”
On being asked whether he would suggest an entrepreneur to sell his start-up to make money or advice to build an everlasting business, he says that he believes in building valuable enterprises. “There is far more wealth to be created by building a valuable business in the long-term. We do not encourage founders to run a business with an eye on cashing out,” Mariwala said, who has also founded Soap Opera, a personal care brand, after opting out of the family business.
Currently, Sharrp Venture’s portfolio has a small exposure to start-ups compared to other assets. Restricting direct investments, Mariwala has consciously followed a strategy of co-investing with VC funds or becoming a limited partner (LP) in them. Co-investing with funds allows Sharrp Ventures to mitigate risk.
The fund’s start-up investments are fairly nascent and three-four years away for exit. However, the portfolio is already seeing impressive post-investment traction in Nykaa, a skincare and wellness brand, healthcare and supplement start-up Healthkart and LEAP.
Filters for Picking Start-ups
The family office follows a pro-active approach in identifying a space or category they want to invest in and then they meet entrepreneurs in that domain.
Sharrp generates deal flow mainly through the funds they have co-invested in and by leveraging their Marico network to bring in proprietary deals in the branded consumer space. “Having built Marico, our domain expertise in consumer products has given us an edge and allows us information arbitrage in knowing and understanding the micro and macro,” Mariwala said.
Branded consumer and consumption-related ideas top the list of sectors Sharrp is focused on. However, going forward they want to build sectoral diversity in their portfolio of start-ups. “We are evaluating health, education and fintech to build a well-rounded portfolio,” Mariwala said.
Beyond Monetary Support
The family office provides business support to companies by engaging the founders in distribution, branding, supply chain, R&D and organization building, among other things. They leverage the Marico network by opening doors to potential investors or by introducing them to domain experts for consultation.Harsh Mariwala also actively interacts with entrepreneurs to lay out specific work agendas for them.