Celeb-led brands are making an entry into the retail scene, connecting instantly with the aspiring masses. Shilpa Shetty recently sold her MamaEarth shares to make eight times more than what she had invested, landing an absolute profit of Rs 39.30 crore. These retail extensions of popular celebrity names have the early advantage over non-celebrity brands, swooping a large market share. Under the ‘passion and cause’ lies a wealth of profit that is ready to eat.

Sample this – latest data from YouGov shows that celebrity beauty brands are not only popular, but more than three in five urban Indian consumers (62%) say they have tried a beauty brand (skin, hair, nail, or makeup) owned by a celebrity. When it comes to awareness about celebrities who own beauty brands, Deepika Padukone leads the table, with over a third of urban Indians (34%) saying that they are in the know. Katrina Kaif and Priyanka Chopra follow in the second (at 32%) and third (30%) positions respectively.

The nitty-gritty of the findings aside, what this data demonstrates is that Indian celebrities are not only popular as actors but also as entrepreneurs today - both independent and in collaboration withstartups, the latter having attained the same cult status as Bollywood and Cricket in the country in the past decade. Looking beyond restaurants and real estate that were once their preferred modes of investments, celebrities are seen rubbing shoulders with founders of startups that are talking to the masses and the classes alike.

BeforeAnushka Sharma,Shilpa Shetty, andKatrina Kaifbecame synonymous with Slurrp Farm, Mama Earth and Nykaa, as a precursor to the trend, one can recount Myntra - the startup posterchild providing a platform, an incubator of sorts, to celeb-led brands likeDeepika Padukone’s ‘All About You’ (launched in 2015) and HRX by Hrithik Roshan (launched in 2013). The company subsequently acquired a 100% stake in the former and 51% in HRX. Over the years Myntra has nurtured several other celebrity-owned brands like WROGN by Virat Kohli, and Saif Ali Khan’s ‘House of Patuadi’. Following in its footsteps, Nykaa partnered with Katrina Kaif in 2019 to launch Kay Beauty.

As the startup ecosystem matured, celebrities found in them a promising investment and entrepreneurial opportunity. According to Invest India’s ‘The Indian Unicorn’ landscape report, India has emerged as the 3rd largest ecosystem for startups globally with over 99,000 DPIIT-recognised startups across 670 districts of the country as of May 31, 2023, Till FY 2016-17, approximately one unicorn was being added every year.

Over the past four years (since FY 2017-18), this number has been increasing exponentially, with a whopping 66% Year-on-Year growth in the number of unicorns being added every year. As of India was home to 108 unicorns with a total valuation of $ 340.80 Bn.

Startups are also equally enthusiastic about having a celebrity as an investor or an investor-cum-brand ambassador because the alignment of purpose and values, as well as the commitment and involvement brought about by such arrangement is far superior than what a brand ambassador alone could bring.

Giving us a bit of a background, Sonya V. Kapoor, Co-Founder, M5 Entertainment, the celebrity and brand collaboration agency that played a pivotal role in Parineeti Chopra’s investment in Clensta, shares some valuable insights on the celeb-startup culture and how it all began. “Celebrity investments in startups have been a trend for the last few years. It was started by celebs like Virat Kohli, Shilpa Shetty, and Sachin Tendulkar; Amitabh Bachchan was one of the pioneers. The success of brands like Mama Earth (Shilpa Shetty) and Nykaa (Katrina Kaif) further cemented their confidence in startups. Myntra also played a significant role in forging the trend in 2015-16 when such associations were not commonplace.”

Almost a decade later, the scenario is dramatically different, with both startups and celebrities demonstrating equal interest in equity deals as they would in regular endorsement contracts. “Startups are definitely preferring investment-cum-endorsement deals today. It’s a mutually beneficial contract. Not only do celebrities help them in building brand recall, but depending on how much interest and equity they have in the company, they also contribute actively to shaping its vision andmarketingstrategy,” says Kapoor. Commenting further on how different these contracts are from regular brand endorsements and what is the biggest challenge in executing them, she adds, “Startups being a completely new ecosystem, there’s low awareness about them, and so celebrities are actually putting in a lot of faith when they decide to move ahead with such deals. Because the celebrity is putting his/her equity on the table, it cannot be a random association. Negotiations and the final conversion of the deal are more complex as compared to a regular endorsement. We have to ensure that celebs are protected in terms of the deliverables, their interests in the project and the RoIs. We are supported by the legal and investment teams on both sides who ensure that it is a win-win for all concerned.”

AN ACTIVE QUEST 

In July 2023, actor Parineeti Chopra acquired a significant minority stake in Clensta, a sciencebacked personal care brand that integrates nature with technology. The Gurgaon-headquartered directto-consumer brand was founded in 2016 by Puneet Gupta.

Talking about how the association came about, and the larger question of whether startup brands are actively seeking celebrity investors today, Puneet Gupta, Founder, Clensta says, “While the kind of partnership, whether as brand ambassador or ambassador-cum-investor or simply an investor completely depends on the startup, it is also a fact that brands don’t go to celebrities to raise money. There are VC and other dedicated funds for that. In our case the product was in place, and we were ready to scale it up. To achieve this scale, we had to build a community and Parineeti Chopra helped us in making it possible in the shortest time span we could think of. When a celebrity like her, who has a following of around 75 million comes onboard with a personal interest and commitment towards the brand, it acts as a force multiplier.” Drone maker Garuda Aerospace partnered with Indian Cricketer Mahendra Singh Dhoni in June 2022 as investor and brand ambassador. Dhoni’s involvement has not only provided financial support but also contributed to enhancing Garuda Aerospace’s brand value and market presence. “His status as a well-respected and admired figure in India has helped garner attention and trust from a wider audience, including potential customers, partners, and investors”, says Agnishwar Jayaprakash, Founder and CEO, Garuda Aerospace. “Celebrity investors have become a common sight in today’s startup landscape, offering benefits like increased visibility, credibility, and networking opportunities. They can open doors to new partnerships, actively participate in marketing efforts, and even aid in fundraising. However, startups should weigh the costs, alignment with brand values, and the celebrity’s commitment carefully. The decision should align with the company’s long-term vision and strategy to ensure a fruitful and mutually beneficial partnership.”

Commenting further on MSD’s involvement with Garuda Aerospace, Jayaprakash adds, “His commitment goes beyond financial backing, encompassing advisory roles, brand ambassadorship, and active participation. With a clear alignment between his personal brand and the startup’s mission, Dhoni’s involvement stands out as a unique collaboration that emphasises quality over quantity, ensuring his contributions remain impactful and exclusive within the aerospace sector.” Pratik Gupta, CEO & Co-Founder of Pluckk, a Digital lifestyle-oriented fresh fruits & vegetables brand which was recently backed by Kareena Kapoor Khan as investor and brand ambassador, adds, “Any investor, including a celebrity, that comes on board has a strategic benefit in mind, but these associations are not outright transactional in nature. Kareena has a certain expertise towards food, towards reaching the audiences and communicating with them. So there’s resonance between her personal brand and the brand Pluckk. In addition to being the face of our campaigns, she also likes to understand our products and services, and shares feedback or suggestions at times, which I believe is a great way for this partnership to progress.” THE RIGHT TIME AND STAGE In July 2021, Bollywood actor, investor and entrepreneur Deepika Padukone invested $2.6Mn in Supertails.com through KA Enterprises, her early-stage venture shop for consumer-focused startups. Varun Sadana, co-founder of Supertails, says, “while we would love this association to culminate in a brand endorsement, having Deepika Padukone as an investor alone has uplifted the credibility and visibility of the brand significantly. She is not just an Indian, but an international celebrity who has been a pet parent.”

Sadana believes that the right timing is essential for any association to be fruitful. He says, “In my opinion, any company should progress from the first stage of proving the business model by getting the right Product Market Fit, to establishing profitability, and then using star power to attract a good set of customers.”

Sustainable Baby & Mom Care Brand, SuperBottoms announced Alia Bhatt as its investor and brand ambassador in July last year. Pallavi Utagi, Founder & CEO SuperBottoms shares that as a category creator and leader in a market dominated by global giants, it was important for the brand to break through the clutter, and with that intention, it initiated talks with Alia Bhatt. “As a new celebrity mom, I’m sure she was approached by other diaper brands as well. However, as a conscious lifestyle enthusiast who was herself using SuperBottoms, she chose to not only endorse but also invest in our brand, and we were open to it.”

Utagi strongly believes that a promising startup which may not be able to afford a celebrity endorser to begin with, should consider getting one onboard as an investor, so they could grow together. “I think that today celebrities are quite open to the idea of supporting small companies that have a strong story through equity deals. They understand that a cash outcome may not always be viable for a startup. In such cases, an association like this is a win-win for both the brand and the celebrity.”

As the co-founder of a fledgling startup, Abhishek Sarwate, CEO of Utopian Smoothies shares his thoughts around having a celebrity brand investor. According to him, “The biggest challenge for a startup is to build trust among its target customer base. Having a celebrity backing adds credibility and validation to any new startup. Onboarding a celebrity brand ambassador should be considered only when it becomes a necessity from a marketing perspective. A startup needs to decide if such expense is really justified to take it to the next level of growth.” Launched in June 2023, Utopian Smoothies is a clean-label packaged smoothies brand powered with superfoods. It sells through its website, Swiggy Minis, Amazon, JioMart, and is available in 20 stores across Mumbai and Pune currently.

Indian celebrities have always been a hot favourite of brands, both traditional and new-age. But the rise of new-age brands today has presented an opportunity for collaboration with worthy partner celebs. Sharing common ground with these brands, celebrities jump at lucrative investment options, which then translates into a positive contribution to the growth story of the country.