How Viable Are Family Offices For Startups?

Between 2014 and 2023, the India start-up ecosystem scaled at a massive scale. During this period, the startups raised a total of $152.1 billion. Of which a whopping $13.1 billion were raised from family offices alone, according to market intelligence platform Tracxn. Gone are the days when family offices used to invest their wealth in stable asset classes like real estate. Now, in a growing trend, they are also adding startups to their portfolios. Since 2014, family offices have backed more than 380 startups.

- PRIYA KAPOOR

The rapid expansion of UHNW individuals in India has led to a growing appetite for more efficient, effective and prosperous ways to invest money and manage assets, and they are doing it through investing in startups directly. According to the first edition of Trica's Private Market Monitor report, conducted in partnership with consulting firm EY and law firm AZB Partners, direct startup investments contributed for 47% of the private market portfolio of family offices, while 32% went to VC/PE funds, and 11% to venture debt funds.

There are currently more than 3,000 family offices globally managing money for the world's wealthiest families. (For the uninitiated, a family office is a private office for a family with considerable wealth). And a one-tenth of them are in India alone, including names like Ronnie Screwala's Unilazer Ventures, Ratan Tata's RNT Associates, Azim Premji's Premjilnvest, and Narayana Murthy's Catamaran Ventures, to mention a few. What's more?

Each of these family offices have been associated with a marquee company or brand in the past. Catamaran Ventures has invested in startups such as Paper Boat, Udemy, Yebhi, and Acko, among others. RNT has made investments in ventures such as Car Dekho, Ola and Snapdeal. Sharrp Ventures which is backed by Harsh Mariwala has in its portfolio brands like Nykaa and LEAP.