Indian Family Offices Increasingly Invest in Startups

Indian family offices are significantly boosting their investments in startups, aiming for higher returns. From Zepto in quick commerce to Mintifi in supply chain financing, these investments span various sectors. Over the years, they've expanded their focus to include emerging areas like chip technology, robotics, space exploration, and green energy solutions, according to Saurabh Rungta, MD and CIO at Avendus Wealth Management.

Significant Investments and Strategic Moves

Family offices, including Premji Invest and MEMG, have participated in over 60 funding deals totaling more than $1 billion in the past two years. This trend is driven by a desire to diversify investment portfolios and the potential for high returns from certain startup investments. Subhakanta Bal, MD at Rothschild & Co India, notes that family offices are becoming a major source of capital for startups, with a preference for companies with solid business models and those nearing an IPO.

Emerging Trends and Future Outlook

The ecosystem of family offices in India has grown from about 45 in 2018 to over 300 currently, with numbers expected to rise. This growth is partly due to promoters of large companies monetizing parts of their businesses and investing in startups. For startups, family offices offer a quicker and more flexible option for raising capital, making them an increasingly preferred choice.