Reliance Industries, India’s most successful company, is aiming to lead the digital revolution in India, thus the company is looking towards startups for technology, talent, and innovative solutions
As Reliance Industries, India’s most successful company is aiming to lead the digital revolution in India, thus the company is looking towards startups for technology, talent, and innovative solutions. In 2016 Mukesh Ambani’s Reliance Industries took a bold step regarding this and decided that its Reliance Jio arm, which was then the Reliance very own startup would set aside an Rs. 5,000 crore venture capital funds to encourage entrepreneurs to build businesses of the future. A year later, at the company’s 40th annual general meeting, Mukesh Ambani again confirmed his commitment to entrepreneurs and startups and said that Reliance has become known in the past 40 years as a company that won the trust of millions of retailers. Mukesh Ambani aspires to make Reliance an enterprise with lakhs of partners and an enabler of a large ecosystem of entrepreneurs. Today Reliance Industries has established itself as India’s most valuable company and is also an enabler of the Indian startup ecosystem. It has stepped up its engagement with startups through outright acquisitions, partnerships, or equity stake purchases.
Mukesh Ambani has been involved in big start-up investment, and in the last three years, he has invested in 23 companies. These firms belong to varied fields which include content production houses to music apps to cable networks to online medicine space. Here are the year wise investments made by the company. By reaching out to startups, Ambani is also taking direct competition with other large tech platforms as it looks to provide more services to its 388 million subscribers. One of the most popular Chinese company Tencent which owns the ubiquitous messaging platform WeChat has invested in over 800 startups, mostly in its home market. Some of these companies, like the food delivery platform Meituan Dianping and the social commerce platform Pinduoduo, have leveraged WeChat to now become China’s most valued companies. RIL’s move could potentially help M&A activity among startups, especially the deals of $100-200 million. One of the biggest problems that startups in India suffer from is that local corporates are not interested in acquiring or investing in local companies, but the size and scale of RIL’s ambition can change the mentality and start the flywheel of M&As.Â
In order to boost product offerings of its subsidiaries, Reliance Industries Ltd (RIL) has made several acquisitions and investments in the past three years which involves Reliance Jio Infocomm Ltd and Reliance Retail Ltd, among others. The investments made by Reliance can be divided as follows:
RIL has put in $566 million in media and education.
$194 million in retail, $1.2 billion in telecom and internet firms.
$100 million in digital and $391 in the chemicals and energy space
The details of the investments made by Mukesh Ambani are as follows:
Embibe
In April 2018, Reliance Industries had invested $180 million in the Edtech startup Embibe over a period of three years. The investment helped Reliance acquire a stake of 72.69 % from Embibe’s existing investors. In April 2020, Reliance again funded the Bengaluru-based startup with Rs 500 crore from Reliance Industries. Embibe is an education platform that uses data analytics to deliver personalized learning outcomes for students. It targets students across K-12, higher education, professional skilling, vernacular languages, and all curriculum categories across India and abroad. With AI stacks focussed on content intelligence and automation, behavioral recommendations, and student intelligence.
Fynd
The fashion e-commerce platform Fynd was founded in 2012 by Farooq Adam, Harsh Shah, and Sreeraman MG. Fynd functions via an offline-to-onlineO2O model and directly sources products across various categories such as clothing, footwear, jewelry, and accessories from prominent brands in India. Fynd focuses on sourcing products from the outlets nearest to the customer to optimize delivery time. It has about 8,000 outlets on board for about 500 clients. RIL acquired a majority stake in Shopsense Retail Technologies Pvt. Ltd which runs fashion portal Fynd for Rs 295.25 crore ($41.9 million).
Saavn
On March 23, 2018, RIL announced a strategic merger of its digital music service JioMusic with the music platform Saavn. RIL acquired a 75-80 % stake in the merged entity. The combined entity is valued at over $1 billion, with JioMusic’s implied valuation at $670 Mn and Saavn with a valuation of $330 Mn. RIL stated that the integrated business will be developed into a media platform of the future with global reach, cross-border original content, an independent artist marketplace, consolidated data, and one of the largest mobile advertising mediums in India.
Netmeds:
On August 19, 2020, Reliance Industries Ltd has acquired a majority stake in online pharmacy Netmeds for about $83 million (Rs. 620 Crore) in cash, days after e-commerce giant Amazon.com Inc launched an online drug sales service in India. The investment represents 60% holding in the equity share capital of Vitalic Health and 100% direct equity ownership of its subsidiaries – Tresara Health Private Limited, Netmeds Market Place Limited, and Dadha Pharma Distribution Pvt Limited.
Den Networks, Hathway Cable and Datacom
Apart from getting bigger in the digital entertainment market, Reliance Jio in bought a majority stake in Den Networks and Hathway Cable and Datacom in October 2018. Jio acquired a 66 % stake in Den Networks with a primary investment of Rs. 2,045 crores and a 51.3 % stake in Hathway Cable and Datacom with an initial investment of Rs. 2,940 crores.
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