Dubai: Neelesh Bhatnagar has never been one to commit to an investment based just on an instinct. No, he wants to see all the likely possibilities and risks in black and white, preferably done up in PowerPoint presentations.
Because Bhatnagar is the ultimate numbers man, basing judgements on cold calculations rather than gut-instinct judgements. So, when he talks about “passion investments”, does it mean one of Dubai’s retail gurus changed his ways?
“One sector which is getting a lot of interest - and eyeballs - of late are companies like Dream 11, Team 11, Hitwicket or DailyFantasyCricket,” said Bhatnagar, who made his fame and an enviable track-record as the head of tech retailer Emax and as a Director at the multi-billion dollar Landmark Group. (In fact, the Board of Directors at the Group was referred to by the competition as the ‘Dream Team’.)
“These are basically competitions using considerable skills, judgement and discretion to engage - and reward - millions of sports lovers across the world. I am evaluating this exciting new trend.”
On the ball
Yes, Bhatnagar doesn’t seem to have lost any of his knack to spot an opportunity. Online sports games that simulate the real thing has grown into a global craze, with any sporting activity being recreated in the virtual space.
Digital cricket possibilities had lagged some of the other games, but gaming options are opening up through the names that Bhatnagar mentioned.
But be assured of one thing – Bhatnagar isn’t going to get into any venture with instinct overruling rationality. “There is always an element of risk in start-ups,” he said. “I do rely a lot on my co-investors, the pedigree of the founder(s), and the capital potential of the prospective company.
“NB Ventures, my venture capital company, keeps the four ‘S’ in mind. Any start-up needs a strategic vision, must be scalable, sustainable, and, of course, saleable.
“There is no pre-determined limit to the extent of my equity. It varies from company to company. I typically look to exit between three- to five years. But again this can vary on a case-to-case basis.”
Sports on the mind
But sporting possibilities are definitely where Bhatnagar invests with a lot of “passion”. There are his interests in United Pro Sports (now rebranded as UPro) and the cricket franchise Delhi Bulls, which plays in the Abu Dhabi T10 League. (And Bhatnagar makes a point of keeping tabs on just about every game that Delhi Capitals is involved in. For the man from Dilli, can it be any other way?)
Taste for F&B
Digital and digital focussed investments are hot-ticket items – but Bhatnagar sees chances in something more traditional, which is the F&B space. In Dubai, he’s building a collection of F&B options, including interests in the red-hot cloud kitchen space.
“We entered the F&B business with our first ‘The Yellow Chilli by Sanjeev Kapoor’ restaurant in 2015,” said Bhatnagar. “While there were many Indian restaurants, there was no brand in the mid-tier casual dining space that offered authentic North Indian cuisine created by a celebrity chef.
“Today, the brand has a presence across the UAE in the dine-in, quick-service and delivery formats. We also have home-grown brands such as Pressman’s Pressed Sandwiches and the Biryani Box a cloud kitchen concept. Then there’s ‘Hong Kong by Sanjeev Kapoor’, which is the Indo-Chinese offering, along with Booster Juices & Smoothies from Canada.
“Restaurant rentals have come down marginally since January and is still the highest cost factor. We expect it to come down even more.”
Clouded with uncertainties
For the wider F&B industry in the UAE, these 13 months have been nothing short of dire. Quite a few shuttered in the mid to lower-mid market space shuttered operations or decided to make do with fewer outlets. Some remodelled their locations to serve as cloud kitchens and the takeaway business.
Cloud kitchens, which is essentially cooking done on an industrial scale, could serve more growth possibilities, according to Bhatnagar. Dubai already has quite a few of them, with even out-and-out residential locations now hosting one or more of these industrial kitchens.
“Apart from the Biryani Box, which is already running, we plan to launch a few cloud kitchen concepts this year. A branded ‘khichdi’ is next in line for launch. For the first time in this market, we plan to launch 21 flavors of the ever-popular khichdi dish.
“As far as breakeven rates are concerned, the F&B businesses are certainly facing challenging times. We expect to get back to profits by end-2021, if not early 2022.”
Restaurant rentals have come down marginally since January and is still the highest cost factor. We expect it to come down even more
Pivot to omni-
Over the last two decades, Bhatnagar’s reputation was made in the brick-and-mortar space. Big-box tech and electronics retailing was his core area; but as important as the stores, what’s happening at the back-end was equally vital. It was his handling of supply chains and logistics that marked him out as being different from other retail sector titans, whose interest started and ended at the stores.
Does Bhatnagar see a future for physical stores to get along with online? “While omni-channel is the future, the pandemic has accelerated the shift to digital across sectors,” he said. “Organizations need to realise their core competencies and prioritize their single channel vs multi-channel presence strategy.”
And not spend too much time over it, please…