Emami group receives applications to fund startups

Posted on November 2, 2016

The Kolkata – based Emami group, which does business in fast – moving consumer goods, retail and pharmacy, is now looking to invest on Indian and foreign startups. Promoted by entrepreneurs R S Agarwal and R S Goenka, Emami group has already received numerous applications from Indian and foreign start-ups, seeking investments to launch or expand operations. The new venture has been taken over by the sons of the promoters, Aditya Agarwal and Manish Goenka. A new division has been created to evaluate and fund start-ups. It will report directly to the board of directors of the group. “We are not limiting ourselves to selected verticals. Once a business idea has been evaluated and if it is to our liking, we’ll take a call on funding”, Aditya Agarwal told.

The funding will come from Emami group’s consolidated coffers and not from any of its individual business units. The funding will not be done by its promoters and directors. The group is, however, yet to decide on the nature of funding and the equity it will take up with the start-up ventures it will fund. “This is a new venture. We have jumped in and are putting things in place”, said Aditya Agarwal.

Though large corporate bodies have been funding start-ups across the country, this is the first time a corporate group from the east has ventured into the space. According to T C Meenakshisundaram, managing director of IDG Ventures India, the corporate investors have specific knowledge about the vertical and the supply chain. Thus, they are in a position to offer value – addition to the start-ups, besides providing them with the necessary funds. However, he cautioned the corporate investors to maintain sufficient reserves and set their expectations right about return on investment to avoid future disappointments. The Calcutta Angels Network (CAN) said that the entry of established companies in the start-up funding space would help the startup ecosystem expand.

India is a country with abundant youth talent. However its economic growth had been stifled due to the lack – luster policies of the previous Congress government. The rate of innovation and innovative startups emerging was close to zero. This lack of innovation stifled India’s economic growth and led to job losses and high unemployment rates across the country. However due to PM, Narendra Modi’s ‘Stand Up India Start Up India’ scheme and ‘Make in India’ scheme, startups have bounced back across the country and would shine well with a little help in the form of investments from established companies. The combination of an innovative startup and an established company would work wonders for both. Established companies can learn a lot of ideas from innovative startups and implement them in their domains. The startups can also use the funding and marketing provided by an established company to expand their business and popularity. But there should be a clear understanding between the two. Established companies should maintain sufficient reserves and set their expectations right about return on investment to avoid misunderstanding and disappointments. Read more on Startup News