014 Bollywood Has The Cake And Wants To Eat It Too
From Brand Ambassadors to Co-founders
Recently, a list caught my attention.
It showcases the richest residents of Mumbai, according to Hurun, with a cut-off of a staggering INR 1,000 crores. Among the familiar names from Bollywood on that list are Karan Johar (INR 1,400 cr), Amitabh Bachchan (INR 1,600 cr), Hrithik Roshan (INR 2,000 cr), Juhi Chawla (INR 4,600 cr), and Shah Rukh Khan (INR 7,300 cr).
According to the list, Karan Johar has made his money through his production company, Amitabh Bachchan through investments, Juhi Chawla through KKR (her husband is also an ultra-high-net-worth individual, for what it’s worth), Hrithik through HRX, and Shah Rukh because of Red Chillies Entertainment.The anomaly among them? Hrithik and HRX.
HR’X-its’
Hrithik along with his friend Afsar Zaidi started HRX in 2012 as a direct response to the growing fitness culture in India. Their aim was to create high-quality, affordable fitness wear and in Hrithik’s words “influence the kids” in the same manner as he was influenced when he was young.
HRX was an instant hit upon launch. Their strategy of partnering with Myntra as their exclusive distribution channel paid off handsomely a few years later. Myntra (owned by Flipkart which in itself is majorly owned by Walmart) acquired a majority stake in HRX in 2016 for an undisclosed amount. Fast forward to 2023, and it was reported that Myntra had increased it’s holding in HRX.
The manner in which Hrithik has breached the INR 1,000/- crore club is rather independent and arduous. Creating your own brand from scratch and achieving a successful exit like HRX is not everyone’s cup of tea. Most celebrities are not taking this route; even though some have tried, almost all have failed.
More Than A Trend
Not everyone is able to take the Hrithik-HRX route. The reality is that it’s incredibly challenging. It’s hard for those with expertise and resources let alone for a celebrity with just hopes and dreams of breaking into an industry and making a mark.
Ask any celebrity if they would like to have a brand of their own and 90% will answer in the affirmative. However, starting from scratch is becoming less common today. Why go through that when you can just barter your brand image for equity?
But that’s not where they are stopping today.
They have evolved from being mere brand ambassadors to investor-cum-brand ambassadors to even investor-cum-co founders.
Celebrities are increasingly looking at coming onboard much earlier in the start-ups journey and get a bigger piece of the pie - whether it’s early to late stage, D2C or B2B, fintech or B2G - it doesn’t matter. If your brand’s ethos and product category aligns with the said celebrity’s fund vision, they are good to go. If required they will extend their brand identity, if not, they are happy to remain as pure investors on the cap table.
The likes of Deepika Padukone, Virat Kohli, and even Malaika Arora have dedicated teams working as mini-VC firms constantly scouting and managing their investments in start-ups. Those who don’t, have their talent management agencies and brand managers doubling as their start-up investment advisors.
At the end of it all, it all depends on the size of the cheque. Most deal sizes remain undisclosed but estimates claim they typically range from INR 4 to 7 cores. That amount though not sufficient for the ‘Series’ stages, is big enough to enter as an angel or the initial seed rounds.
(FYI - that average of INR 6 crores is what Akshay Kumar gets per endorsement per year, and he has a reported 40 brands that he endorses currently.)
Celebrity Investments
Deepika Padukone and Virat Kohli lead in terms of portfolio companies; some of which they have already exited. Below are a few bets that have paid off and are public knowledge:
Shilpa Shetty invested in MamaEarth when it was valued at INR 35 crores; it is now a unicorn worth INR 11,000 crores.
Shraddha Kapoor timed her investment in MyGlamm perfectly. When she invested, it was valued at an estimated USD 100 million; just months later, the company achieved unicorn status with a valuation of $1.2 billion after raising $150 million in a Series D round.
Sachin Tendulkar backed Azad Engineering with a INR 5 crore investment and reportedly made a return of 530% when it went public later.
Other notable mentions include:
Alia Bhatt in FSN E-commerce (Nykaa's parent company)
MS Dhoni in Khatabook and Cars24
Farhan and Zoya Akhtar in Ola Electric
Priyanka Chopra in Bumble India
But is it fruitful for the start-ups though?
Simple answer is yes.
Instead of working your way up from traditional influencers to celebrities, these start-ups have celebrities from day zero. Not only do these start-ups see an increase in their brand visibility, but they also see a faster RoI compared to traditional funding rounds. Traditional VCs (whose cheque sizes can be over 100x than the celebs) are also becoming more warm to celebrity backed start-ups.
I like what someone said regarding AI start-ups attracting funding from big institutions in the US - the big companies rather invest and lose than not invest at all, for if there will be a platform shift then they will be out of the game forever. It seems like the Indian celebrities are in a similar boat currently. The chance of making generational wealth is staring at them and if they manage to place the right bets, they stand to gain significantly.