The booming investor ecosystem and innovations from start-ups have drawn attention of celebrities, who are also financial powerhouse. The last few months have seen an increasing interest from celebrities to tap into the growth in this segment, by turning investors for these new age brands.
It is not just Bollywood celebrities who are investing in start-ups, but also sports stars, content creators and social media influencers. Recent examples of celebrities who have turned investors-cum-endorsers for various start-ups include Anushka Sharma for slurp farm, direct-to-consumer (D2C) kids’ snack brand, and Rakul Preet Singh for wellbeing nutrition.
These celebrities don’t just invest in D2C start-ups. In December 2021, siblings Zoya and Farhan Akhtar infused Rs 21 crore and Rs 10 crore respectively in Bhavish Aggarwal- owned Ola electric. Gujarat- based innerwear brand XYXX recently made headlines, as cricketer KL Rahul on boarded it as an investor and endorser.
Marketing expert Jessie Paul, CEO of B2B consulting firm PUL Writer, says, “The two primary expectations from celebrities’ endorsers are reach and credibility. If the celebrities can change behaviours or get users to adopt the brand, it’s even better. For consumer, a brand that can afford celebrities appears to be financially sound. The celebrities has clearly consumer done due diligence before recommending it to his followers”
Aviral Jain, managing director, Duff and Phelps, says that association with a celebrity ensures instant visibility, higher customer engagement rate and a better brand recall.
“These key ingredients help attract funds and command a higher valuation multiple. However, a celebrity can only be a catalyst and not the sole way to increase sales. If a brand is unable to establish a relevant market fit, roping in a celebrity brand ambassador may not contribute much. Thus, a celebrity association should be viewed more as a way to build top of funnel recall and boosts sales”, adds Jain.
It must be mentioned that this trend has been witnessed over the last few years where celebrities do not just confine their association with brands by way of endorsements, but have also turned into investors and strategic partners.
Flavoured Yogurt brand Epigamia was launched in 2015. In 2021, Deepika Padukone launched a new range of healthy chocolate spreads in collaboration with the brand did not just help it garner media attention and popularity among the masses, but also expanded its distribution to a dense network of mom- and- pop stores.
“Celebrities gain from becoming investors, as they are exposed to the growth that the brand may foresee. The start-ups that are on the lookout for funding, have found an option to raise capital via celebrities endorsements. The collective synergies between the celebrities and the brand, contribute to the success of the latter. It is a calculated risk for both entities,” Arora, executive director, signs off.
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