The Birla Group is getting ‘Disruptive’ about its investments

Do you have an idea that could disrupt the current market dynamics? If yes, this will help you. One of India's largest conglomerates, the Aditya Birla Group will establish a dedicated fund for investing between $2 and $10 million in disruptive ideas across the areas of financial services, healthcare and retail.

Yes, you heard it right, disruptive ideas! A person directly familiar with the matter has confirmed it to the Economic Times.

The group will finance this startup-focused initiative. Umesh Adhikary, president of corporate strategy at Aditya Birla Management Corporation, will lead the group’s initiative which will be announced in a few weeks.

According to the person mentioned above, the conglomerate, with revenue of around $40 billion, has already approached top venture capital executives to be a part of the initiative.

This is not new for top conglomerates in India. The Tata Group and Reliance Industries have already started looking at startups working on ideas that have the potential to disrupt current market dynamics in the areas of their business interests.

For example, Reliance partnered with Microsoft Ventures last year to initiate a startup accelerator, GenNext Innovation Hub.

Apart from Tata Group CTO Gopichand Katragadda, who has started tapping into the Bengaluru startup hub, group's chairman emeritus Ratan Tata himself has become a one-man VC firm.

The $100 billion group has already invested in around a dozen startups over 12 months, including Xiaomi, the world's second most valuable startup after Uber.

Rishikesha Krishnan, director and professor of strategy at IIM-Indore is of the view that the move underscored a realisation by these conglomerates that there's value being created outside.

New industries will come every day and the ultimate route is to become an investor, said Krishnan.

However, as these conglomerates tap into the disruptive world of startups, they face challenges. "It's not like an Alibaba, which backs Paytm with the required understanding. Startups are also looking beyond just money while choosing an investor," he added.

(Image: Indiatimes)