Prominent Indian conglomerate Godrej Industries is making a strategic move by establishing a family office to invest in new-age businesses. According to a recent report by Mint, the family office will begin its operations with an initial fund size of several hundred crores and will seek additional funding as opportunities arise.
Nadir Godrej, a key figure within the Godrej family, shared insights on the establishment of the family office, explaining, “Because we have a very diversified business, we usually invest through the businesses.” This move comes approximately two months after reports surfaced about Godrej’s consumer products arm planning to invest INR 100 crore in Early Spring, an early-stage fund launched by Spring Marketing Capital.
The collaboration with Spring Marketing Capital, which operates a fund worth INR 300 crore, may not offer the same level of autonomy as an independent fund. Thus, consolidating early-stage investments under a family office makes strategic sense for the conglomerate.
Overseeing the family office will be Pirojsha, the son of Adi Godrej. In the past, Nadir Godrej has made personal investments in various companies, including Hector Beverages, the parent company of the renowned traditional beverages and foods brand Paper Boat.
This move by Godrej Industries reflects the growing interest among major Indian businesses to make substantial investments in the country’s startup ecosystem. Notable companies like Wipro, Tata, Reliance, and Infosys have all made significant bets on Indian startups in recent years.
Furthermore, the establishment of Godrej’s family office comes at a time when India’s startup ecosystem is experiencing a funding drought. According to Inc42’s ‘Indian Tech Startup Funding Report, Q1 2023,’ Indian startups raised only $3 billion in the first quarter of 2023, a staggering 75% decline compared to the same period in the previous year. Similarly, in April 2023, Indian startups managed to raise only $888.45 million, a significant 66% decrease compared to April 2022, when funding reached $2.6 billion.
In this challenging funding landscape, Godrej’s family office represents a potential source of support and investment for Indian startups, offering a glimmer of hope in an otherwise difficult period.
