Reliance Industries Ltd (RIL) has made acquisitions worth $3 billion in the past three years to boost product offerings of its subsidiaries - Reliance Jio Infocomm Ltd and Reliance Retail Ltd, among others. Out of the $3 billion invested for acquisitions, 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 acquisitions by Reliance Industries clearly project RIL’s aspiration to be among the top 20 companies in the world. Along with refining and petrochemicals, Reliance Jio and Reliance Retail, could play a part in achieving the feat. RIL’s telecom venture - Jio has helped improve its perception for consumer services. The survey indicates that the perception of RIL’s consumer services has improved after the launch of Jio with 66% users considering it as a more consumer-friendly brand.
Within 2 years, it acquired or invested in Balaji Telefilms (TV content), EdCast (learning enabler), Embibe (edtech content), Saavn (music content), Radsys (5G architecture), Eros (TV content), Hathway (broadband), DEN (cable), Haptik (customer engagement), Reverie (language processing), Fynd (online shopping), Tesseract (AR/VR) and Grab (logistics).
Within 2 years, Mukesh Ambani through RIL invested in many firms working on arious technologies; be it artificial intelligence (AI), internet of things (IoT), blockchain, online multiplayer gaming, multi-party videoconferencing, augmented reality (AR), virtual reality (VR) and mixed reality (MR). So the acquisitions are only an extension of RIL’s ambitions.
Reliance Industries Acquisitions
In April 2018, Reliance Industries had invested $180 million in the edtech startup Embibe over a period of three years. The investment helped acquire a stake of 72.69 % from Embibe's existing investors. In April 2020, Bengaluru-based startup Embibe received a funding of Rs 500 crore from Reliance Industries.
Embibe is an education platform that uses data analytics to deliver personalised 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, behavioural recommendations, and student intelligence.
Post-acquisition founder and CEO of Embibe, Aditi Avasthi has continued to lead the company and might operate it as an independent entity as well. With Embibe’s technology, Reliance aims to connect over 1.9 Mn schools and 58,000 universities across India. It believes that Embibe’s highly experienced management team will help enable Reliance realise its vision for the education sector.
The fashion ecommerce 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, jewellery and accessories from prominent brands in India. Fynd sourcing products from the outlets nearest to the customer to optimise delivery time. It has about 8,000 outlets on board for about 500 clients.
Fynd’s in-house product the ‘Fynd Store’ store managers place order on behalf of walk-ins, in case the desired product is not stocked or not available in the right size in the store. RIL acquired a majority stake in Shopsense Retail Technologies Pvt. Ltd which runs fashion portal Fynd for Rs 295.25 crore ($41.9 million).
RIL also has an option to further invest Rs 100 crore in Shopsense Retail Technologies, which runs Fynd, by December 2021. The total investment will translate into an 87.6% stake in Fynd. The investment would enable the group’s digital and new commerce initiatives. Reliance has been strengthening investments and acquisitions in the tech and Internet space as it prepares to launch services like e-commerce with the help of its huge reach through Reliance Jio Infocomm.
In February 2019, RIL’s wholly-owned subsidiary Reliance Industrial Investments and Holdings Limited (RIIHL) will acquire equity shares of Grab A Grub Services Private Limited (Grab) in a cash deal worth $14.9 Mn or Rs. 106 Cr. At a later stage, the company will also invest up to $5.63 Mn (INR 40 Cr) to complete the acquisition deal by March 2021.
With this investment, RIL will control 83% equity of Grab on a fully diluted basis. The investment will support Reliance Group’s “digital commerce initiatives and strengthen its logistics services, catering to both B2B (business-to-business) and B2C (Business-to-consumer) segments. The deal would help the company boost its e-commerce model to take on its rival Amazon India and Flipkart in the country.
Grab was founded in 2013 by Jignesh Patel, Nishant Vora, and Pratish Sanghvi. Grab provides services ranging from on-demand, reverse deliveries, first mile, and last mile logistics. Some of its clients include McDonalds, BigBasket, Myntra, Amazon Now, Swiggy. It was backed by investors such as SIDBI Venture Capital Arm, SIDBI Venture Capital Limited (SVCL) Aramex, Zomato and Sixth Sense Ventures.
On April 3, 2019, RIL announced that Reliance Jio Digital Services Limited has acquired artificial intelligence (AI) firm Haptik for Rs 700 crore, with Rs 230 crore as the consideration for the initial business transfer that could compete against Google Assistant and Amazon's Alexa. Thus, Reliance will hold about 87% of the business with the rest being held by Haptik founders and employees through stock option grants.
Founded in 2013, Haptik is one of the world's largest conversational AI platforms that lets customers chat with their voice assistants to complete daily tasks such as online shopping, travel bookings, food delivery among others. The company has worked with over 50 brands such as Samsung, Coca-Cola, Future Retail, KFC, Tata Group, Oyo Rooms, Mahindra Group, etc. The company expanded to the US in 2018 and the UK in 2019.
With the deal, Reliance Jio is looking to leverage Haptik’s capabilities across various devices and touchpoints in the consumer’s journey. Reliance said that the investment is to focus on the enhancement and expansion of the platform, with an addressable market opportunity of over 1 Bn users in India.
In April 2019, RIL acquired Reverie with majority stake for Rs 190 crores ($27.3 Mn) and will invest Rs 77 crores (almost $10 million) by March 2021. As part of the acquisition, Reliance will hold 83.3 % equity capital in Reverie on a fully diluted basis, with the total investment of Rs 267 crore likely to be completed by March 2021.
Reverie provides a voice suite (called Gopal) in 12 Indian languages like Hindi, Telugu, Tamil, Bengali, Marathi, Gujarati, Indian English, etc. which can be integrated with both chatbots and Interactive Voice Response (IVR) solutions which companies can use to engage with non-English speaking customers.
Reverie will work towards integration of its Indic language localization services with RIL’s digital consumer platforms. It will continue to operate independently and serve its existing clients. Reverie would work in collaboration with the Reliance ecosystem for integrating its services in the various existing digital consumer platforms of the group.
On March 23, 2018, RIL announced a strategic merger of its digital music service JioMusic with music over-the-top platform Saavn with RIL acquiring a 75-80 % stake in the merged entity. The company said that 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.
"The investment and combination of our music assets with Saavn underlines our commitment to further boost the digital ecosystem and provide unlimited digital entertainment services to consumers over a strong uninterrupted network," Ambani had said while announcing the strategic transaction.
JioSaavn has over 200 employees and operates out of five offices in California, New York, Bangalore, Gurgaon, and its headquarters in Mumbai. It offers about 40 million tracks in 15 languages and has over 900 label partnerships such as, with Universal, Sony, T-Series, Tips, YRF, Saregama, Eros and Warner Music.
In August, 2019, Reliance acquired a stake of 80-85% in Tesseract post the deal that would be valued between INR 150 Cr and INR 500 Cr, the source added. Reliance also announced its mixed reality (MR) platform Holoboard that combines augmented reality and virtual reality. Holoboard would the first made-in-India AR headset and works with smartphones. Interestingly, the device is developed by Tesseract.
Tesseract is a Mumbai-based VR startup founded in 2015 by Kshitij Marwah. Tesseract has launched three hardware and two software products in the MR, AR, and VR spaces. The founder claims to have seven patents: one US, three international (130 countries), and three India patents.
Post-acquisition, Tesseract has developed the Jio HoloBoard as a native mixed reality headset for JioFiber users. While specifics about the Jio HoloBoard are yet to be revealed, Reliance Jio plans to make the headset available for purchase in the market at an extremely affordable price.
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.
DEN claims to have the ability to reach 9.7 lakh homes but has more than 106,000 broadband subscribers. Hathway Cable is owned by the Raheja Group, while Sameer Manchanda owns DEN Networks. They both are amongst the biggest players in the cable broadband market.
The investments were majorly aimed to boost the rollout of Jio GigaFiber which is already in testing to take on Bharti Airtel, BSNL, and other broadband providers in the country. Reliance Jio also importantly has the wireless infrastructure assets of RCom to conolidate its telecom presence.
Reliance Industries completed the acquisition of British toy retailer Hamleys for about Rs 620 crore (GBP 67.96 million) in an all-cash deal in July 2019 as Reliance Brands had signed an agreement to acquire 100% stake in Hamleys Global Holdings from Hong Kong-based C.banner International.
RIL stated that Reliance Brands has completed the acquisition of 100 % stake of Hamleys Global Holdings (HGHL) through a special purpose vehicle company set up in the United Kingdom. This acquisition will help Reliance Brands to become a dominant player in the global toy retail industry.
Hamleys was founded by William Hamley in London in 1760. Now it is one of the world's oldest retailers of toys and has changed hands several times. Currently, Hamleys has 167 stores across 18 countries. In India, Reliance Retail had the master franchise for the brand and operates 88 stores across 29 cities.
In the last December, RIL owned subsidiary Reliance Strategic Business Ventures Ltd (RSBVL) acquired a 51.78% stake in robotics and artificial intelligence company Asteria Aerospace Pvt. Ltd for ₹23.12 crore. Asteria develops drone-based solutions to provide intelligence from aerial data for military and industrial applications.
In December, RSBVL also acquired a 85% stake in NowFloats Technologies Pvt. Ltd for ₹141.63 crore with a proposal to make further investments of up to ₹75 crore. Nowfloats offers SaaS solutions to small and medium enterprises (SMEs) that enable them to get a digital presence. The investment will further enable the group's digital and new commerce initiatives.
RIL also acquired open telecom solution provider Radisys in June last year for $74 million (Rs. 511 crores). That deal was majorly focused towards enhancing Reliance Jio's presence in the areas of 5G, Internet of Things (IoT), and open source architecture adoption.
In addition to this, RIL made deals specifically to amplify the occupancy of Reliance Jio by acquiring software companies namely Surajya Services (EasyGov), and SankhyaSutra. Surajya Services(EasyGov) is a data solution company that is popular of its EasyGov online portal that details government schemes and services to citizens. While, SankhyaSutra Labs offers high-performance computing software simulation services.
Apart from this, RIL also invested in entertainment industry. acquired a 25% stake in film and television production house Balaji Telefilms Ltd aka ALTBalaji in a deal worth Rs413.28 crore. The stake purchase will give Reliance Jio Infocomm Ltd. access to content generated by Balaji Telefilms. RIL also acquired 5% stake in film entertainment company Eros International for $48.75 million, as video content becomes a key driver to drive data consumption for its telecom venture Reliance Jio.
In the coming future, Reliance Jio and other Reliance Industries' subsidiaries are likely to continue their acquisition trend to retain their leadership in the market. But the results of the acquisitions are yet to be majorly seen from the user perspective.