Storyboard | What really happens when celebrity brand endorsers turn investors

Alongside regular funding benefits, marketing heads suggest how celebrity involvement sometimes pushes the overall valuation of the brand. But there's also a downside

Updated: Oct 1, 2021 01:05:44 PM UTC
Deepika Padukone is a strategic investor in Drum Foods International, the makers of Epigamia, a product line of ghee spreads she co-created.

Celebrities are on a shopping spree. We are not talking about just luxury cars or lavish homes. Building a strong investment portfolio for themselves, sports stars and B-town celebrities are not just funding but also advocating for new businesses.

Brands couldn’t be happier. They are making the most of the deal by using the popularity of their celebrity-investor to scale growth as well as drive engagements. According to marketing executives, celebrity involvement sometimes pushes the overall valuation of the brand.

Whenever a celebrity comes on board it shows that they are not just endorsing the brand but are actually personally invested. This has an impact on the fans as well, who would then look at this product as something their hero "owns".

The league of extraordinary brand endorsers
At the top of the pack of celebrity endorser-investors is actor Deepika Padukone who has placed her bets on several startups. Padukone invested in Bellatrix Aerospace, BluSmart, FrontRow and now Cleantech Startup Atomberg Technologies. The investor's latest appearance in a commercial for one of her portfolio companies was for Epigamia spreads. Padukone, who was seen spreading chocolate ghee on bread, is a strategic investor in Drum Foods International, the makers of Epigamia, a product line of ghee spreads she co-created.

Others like Aishwarya Rai Bachchan, Anushka Sharma and Akshay Kumar are also investors in several startups. Priyanka Chopra Jonas is an investor in American dating app Bumble. The actor appeared in the app's first India campaign, ‘Equal Not Loose’, did well for the brand. The app, according to reports, clocked record downloads after the campaign ran across television and print media.

Not to be left behind, cricketers such as MS Dhoni, Sachin Tendulkar and Virat Kohli are also batting for young brands as investors and ambassadors.

Recently, Virat Kohli partnered with global wellness brand Hyperice as an investor and brand ambassador. The brand is excited to have the Indian skipper on board as Kohli, according to them, is a natural fit and will push the brand’s popularity in the country.

Good for brand value and valuation  
“Hyperice is rapidly expanding in countries throughout the globe and India is one of our top three expansion markets,” Mayuri Pitale, director, business development and marketing, Hyperice India, tells Storyboard. The company is strategically building its business locally and views its relationship with Kohli as a massive “growth accelerator”. Hyperice is also approaching a billion-dollar valuation. Pitale says, “Virat’s involvement in our global expansion will play a significant role in helping increase our valuation.”

The effect of the Kohli name bolted on the brand is practically instant. With him on board, Hyperice is already seeing a lot of interest and excitement around the brand in the country, Pitale says.

But before Kohli became leader of the endorsements league, Sachin Tendulkar was the one they all wanted. Though Tendulkar’s popularity among brands is not as high as it used to be, he’s still a dependable name. Recently, the legendary cricketer made an equity investment of $2 million in JetSynthesys.

Tendulkar and JetSynthesys already have existing joint ventures like Sachin Saga Cricket Champions and Sachin Saga VR. With this investment, Tendulkar becomes an even more crucial member of the JetSynthesys ecosystem.

“Sachin stands for global excellence, trust and many such values that resonate with JetSynthesys products, platforms and services,” says Rajan Navani, vice chairman and managing director, JetSynthesys.

When this association began, the aim was to provide “an authentic gaming experience for cricket lovers across the globe,” he adds, now the team is looking to “diversify that purview to include more cross category digital products and platforms.”

Tendulkar is also an investor and brand ambassador for edtech major Unacademy.

All that glitters can fade: The downside of a celebrity ambassador-investor
The downside of having a famous personality, always in the public eye, is that their fame can also adversely impact the company's fortune. We've seen that several times over the past couple of decades, with celebrity brand endorsers and boycott trends—where something a celebrity said or did came back to bite the brand they endorsed. In some cases, where the backlash was too extreme, brands have had to drop the celebrity from their roster.

Ace swimmer Michael Phelps was taken off by Kellogg after a leaked photo of him smoking pot went viral. Tiger Woods was abandoned by brands like Gillette, Gatorade, Accenture and AT&T, when the American golfer made headlines for being an “adulterer”.

There are examples in India too. Salman Khan, for instance, was dropped by Coca Cola after several controversies around the actor like the hit-and-run case, blackbuck case, and others emerged which kept the actor in the news cycle for all the wrong reasons.

When Aamir Khan spoke about rising intolerance in the country, Snapdeal terminated his endorsement contract and so did the government’s Incredible India campaign. Snapdeal claimed that Khan’s was a simple case of the contract nearing its end anyway.

Here's where it gets complicated. When a brand ambassador is also an investor in the company, it's hard to detach and drop the celebrity. But, we suppose, that's just the risk and cost of wanting a slice of fame.

The thoughts and opinions shared here are of the author.

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