File photo.Ratan Tata has invested in more than 25 Indian start-ups over the past 24 months. Photo: Abhijit Bhatlekar/Mint
Mumbai: Ratan Tata said his investments in start-ups are aimed at enabling goods and services to reach a large section of the population, although the chairman emeritus of Tata Sons Ltd admitted that valuations of some of these companies are high.
“There are tremendous opportunities in reaching this population and the task is being undertaken by passionate young people. They need backing,” said Tata, who is also chairman of Tata Trusts. “Having said that, some of the valuations are pricey. I support those who are really making a difference.”
Ratan Tata has invested in more than 25 Indian start-ups over the past 24 months.
In an interview to Tata Review, the business group’s internal publication, Tata said he is supporting “young entrepreneurs who are doing something you respect or are in an area that you feel has been ignored.”
“By and large I’ve been backing businesses in the e-commerce space because they enable goods and services to reach people who could never have been catered to in this manner before. They never got a chance previously to order what they wanted, have it delivered at their doorstep, pay when they receive it, and return it if not acceptable,” Tata said.
“This sort of reach has never been there in the brick-and-mortar world,” he said adding India has a consumer population of 300 million that may go up to 600 million in the years ahead.
Tata Review was interviewing him on journey ahead for Tata Trusts.
Ratan Tata said Trusts will have to keep renewing itself every three-to-five years to see whether it is missing something because governments may not able to extend help to the community.
Tata said governments are “going to be confined to their own people and there are going to be political issues; someone else has to at least define what can be pursued.”
Asked about Tata Trusts evolving over the next five years, he said Trusts are doing reviews and it will be forever looking at enhancing the quality of life of the people it seeks to help.
“Today we are talking about diseases and cures; tomorrow it could be climate change,” he told the publication.
Tata Trusts are among India’s oldest philanthropic organisations that work in several areas of community development.
Tata Trusts seeks to catalyse development by giving grants to institutions in the areas of natural resources management, rural livelihoods, urban livelihoods and poverty, education, enhancing civil society and governance, health and media arts, crafts and culture.
Tata Trusts have an annual outlay of over Rs.550 crore in philanthropic work of which 80% is allocated to partnerships for specific initiatives reaching out to over 4 million households.
Referring to the grant-giving process, Tata said all proposals should have a sustainability objective.
“A grant is given for three-to-five years typically; everybody should accept that it is not going to be for infinity. The NGOs who operate on the belief of perpetual funding may feel upset that a grant has stopped, which is why there needs to be clarity about the funding period. We have to state upfront what our intent is. We can never spread ourselves otherwise; we will never have adequate grant funds to provide new initiatives other than the few we are supporting,” he said.
Tata said Trusts had appointed the Bridgespan Group (a non-profit consulting firm in 2014) to validate some of the issues that the Trusts was trying to verify.
The idea was Trusts wanted to change the form of their philanthropy from one that was predominantly executed by non-government organisations (NGOs) to one where they would manage some of the projects by themselves, he said.
“We would continue to collaborate – the trusts to NGOs to communities system – but now we would also be involved directly,” Tata said.