Indian legendary batsman Sachin Tendulkar is no more an investor in travel portal Musafir.com as he has exited from it after a period of five years. After his retirement from his international career in 2013, Sachin had opted for sweat equity of 7.5 per cent in exchange for appearing in the firm’s ads. From past five years, he has been receiving a sum of ₹1 crore every year and was assured a minimum of ₹20 crore at the time of exit.
The CEO of Musafir, Giya Diwaan admitted: “We had a cordial commercial relationship with Sachin Tendulkar, like any celebrity deal, for the past five years. The documentation is under process, and it is a cooling period between us and his company. He came in 2013 as a brand endorser and no longer features in our ads. We have so far not sold Tendulkar’s equity to any investor.”
He further elaborated, “Sachin is being careful about the kind of retail brands he endorses. He expected Musafir to get valued at $100 million so that he could get ₹50 crore as an investor. But he managed to get ₹20 crore as he realized it was going to take much longer for the company’s valuation to go up.”
The Managing Director, Alchemist Marketing and Talent Solutions, Manish Porwal also observed, “Travel was a non-core area for Sachin to endorse, and in most cases, celebrities trust the promoters when they make such deals. The digital business is futuristic and it gets laden with risks when there has to be an exit as there are fewer cash reserves with such companies.”
According to aware sources of the deal, Sachin needed to feature in the ads for three days in a year and he was to receive ₹5 crore for that as a part of his sweat equity deal. They have given him two options either exit with a minimum of ₹20 crore or wait and get back an amount depending on the valuation of Musafir at the time of exit. Sachin had chosen the former as he believes that the valuation of the company did not go up significantly.
The Founding Partner of Sportoid Sports Solutions Harish Krishnamachar, who has handled some of Tendulkar’s endorsement, said: “There is no way for celebrities to verify valuations as professional fund managers themselves struggle in this area. One round of funding to the next could see a doubling or more likely a halving of valuation, depending on the desperation of the founders for cash. The deals are entered into based on future potential and forecasts by promoters. In addition, they (celebrities) try and factor in the cost of their physical time and look for a return that at least commensurate with that. Celebrities, of late, have tried to at least ask for a fixed fee on exit after a few years, in the event that valuations don’t measure up to expectations.”