Actor Salman Khan Picks Around 5% Stake In Yatra.com; Is This A Growing Trend In Bollywood

28 Mar, 2012

Bollywood actor Salman Khan has invested an undisclosed amount in Gurgaon-based online travel company Yatra.com picking up a little less than 5 per cent stake in the company, according to Economic Times. As part of the multi-layered deal, he has also become the brand ambassador of Yatra and will be seen in the company's new marketing campaign (in India and USA) as 'Mr Yatra'.

When we contacted Dhruv Shringi, CEO & co- founder, Yatra.com confirmed that the actor has picked a stake but declined to comment on the stake or the deal value. "We are excited to have Salman Khan as part of the Yatra family both as a brand ambassador and shareholder. We have always wanted expand to newer mass markets and associating with Salman Khan would enable us to do the same," he said.

Additionally, as part of the deal, the actor's NGO- Being Human will also benefit from this association since Yatra.com will make a provision to enable its customers to contribute a token amount to Being Human every time a transaction takes place on the site. The company will also sell Being Human merchandise on its website.

Although the company has said that it is a multi-layered deal, it hasn't disclosed the details and this makes us curious because Khan usually charges in multiple of crores for a single advertisement and the fact that he is going to be part of the entire campaign means that- either the actor is being paid for the ads separately, or he has bought the stake in the company from the compensation amount that he should have received for the ads (which is what we would guess it to be).

Last April, Yatra had raised Rs 200 crore in a pre-IPO round of funding led by San Francisco-based Valiant Capital Management, with Norwest Venture Partners and Intel Capital participating as well. Yatra had previously raised a total of Rs 150 crore from Norwest Venture Partners, Reliance Capital, Network 18 and Intel Capital, the strategic investment arm of chipmaker Intel.

"The association is part of a well thought-out strategy to strengthen the company's connect with the masses and increase the brand's recall value in tier 2 and tier 3 towns," said Pratik Mazumder, head marketing & strategic alliance at Yatra.com. "Online flight travel booking accounts for nearly half of the total flight booking done in India for domestic flights. And Yatra.com has almost one third share of this market as of now," he added.

Yatra.com will be launching their new marketing campaign with Salman Khan in April. The company earlier had Bollywood actor Boman Irani as its brand ambassador. Early this year, the company acquired common investor (Intel Capital) backed Buzzintown, a website that provides information on deals and events.

Is This A Growing Trend

In the recent times, a lot of Bollywood actors have either invested in e-commerce companies in India or even opened up their own business. Even cricketers from the Indian cricket team are not far behind. Some of the examples are-

Karisma Kapoor invested in BabyOye.com, a baby products site; Sanjay Dutt and Ajay Devgan invested in Ticketplease, an online ticketing site; Shilpa Shetty invested in GroupHomeBuyers.com, a home-buying site; Vatsal Seth invested in Celebwears.com, an online store that sells customized wardrobes and celebrity clothes; Neha Dhupia actually launched her own e-commerce site called HerStyle.in that sells women's apparel, fragrances and personal care products, etc.

Cricketer Yuvraj Singh invested in Exclusively.in while Zaheer Khan invested in Exclusively.in's new label Sher Singh.

We can understand the rationale from the company's point of view, a celebrity investment is a win-win move as they get money (at times besides the barter deals) plus they can cash in on the celebs fan following and mass appeal. But the million dollar question is 'why are these celebs investing in the e-commerce space in the first place'. Are they bored of simply buying new properties spread across the world (which is what many of them generally do) and want to try something new, or have they actually woken up and realized that the e-commerce boom in India is here to stay this time around. Only time can tell.