MUMBAI: Indian family offices are increasingly placing their bets on startups which, if made right, can generate higher returns.
From quick commerce’s Zepto to supply chain financing startup Mintifi, investments from family offices are straddling sectors. They have broadened their coverage of new-age companies over the years, and are looking at emerging sectors like chip technology, robotics, space exploration and green energy solutions, Saurabh Rungta, MD and chief investment officer at Avendus Wealth Management, told TOI.
Family offices including Premji Invest – investment arm of Wipro’s Azim Premji – and Manipal Education and Medical Group (MEMG), led by Ranjan Pai, participated in over 60 funding deals totalling over $1 billion (includes funding rounds backed jointly by family offices and other investors) in this year and the last alongside other investors, data sourced from market research firm Venture Intelligence showed.
Family offices, a fair amount of which have been set up after 2010, want to diversify their slate of investments and this trend in large parts is spurring their appetite for startups, said Subhakanta Bal, MD at Rothschild & Co India. “They want to hold instruments across asset classes. Certain startup investments can give high returns and in that sense, they fall under high reward category. Family offices are now emerging as a very large pool of capital and their share in startup investments will only go up going ahead. Today, they have more comfort to write in larger cheques,” Bal said, adding that companies with solid business models and those ready for an IPO tend to get a bigger allocation of capital from family offices.

In Nov, Zepto – which is preparing for a potential listing in 2025 – raised $350 million in a domestic funding round, backed by a clutch of family offices including Mankind Pharma Family Office, Cello Family Office and Haldiram Snacks Family Office. About a year before FirstCry’s Aug 2024 listing, MEMG Family Office, Marico chairman Harsh Mariwala’s Sharrp Ventures and Hemendra Kothari’s DSP Family Office invested in the startup largely through secondary transactions.
Traditional families have typically had low single-digit allocations in startups as they still look for positive ebitda and profitability in the business. However, new-age family offices or families, where the next generation is the decision maker, have higher allocation for startups.
“Family offices of promoters from new-age companies often allocate over 50% of their portfolio to this sector. This allocation reflects a familiarity bias, as a significant portion of the wealth managed by these family offices has been generated within this space,” Rungta said.
From about 45 family offices in 2018, the ecosystem has grown to over 300 such offices currently and the number is only set to rise, a study by PwC showed. Several promoters of large companies have monetised parts of their businesses by way of M&As over the past few years and are keen on using the liquidity garnered to set up family offices and invest in startups, analysts said.
For startups, family offices are equally becoming a more preferred option for raising capital as they tend to be quicker in taking investment decisions and are also flexible in terms of negotiating investment terms.