Reliance Industries Ltd. (RIL) made several acquisitions in the past three years to boost the product offerings of its subsidiaries—Reliance Jio Infocomm Ltd. and Reliance Retail Ltd., among others. 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 firms, and $391 million in the chemicals and energy space.
The acquisitions by Reliance Industries clearly project RIL’s aspiration to be counted 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 in terms of consumer services. A survey indicates that the perception of RIL’s consumer services has improved after the launch of Jio with 66% users considering RIL as a more consumer-friendly brand.
Within 2 years, Reliance acquired companies such as 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).
The companies acquired by Reliance are working on various technologies: artificial intelligence (AI), internet of things (IoT), blockchain, online multiplayer gaming, multi-party videoconferencing, augmented reality (AR), virtual reality (VR), and mixed reality (MR). These acquisitions are an extension of RIL’s ambitions.
Reliance Industry Acquisitions
Den Networks and Hathway Cable & Datacom Ltd.
Balaji Telefilms and Eros International
In April 2018, Reliance Industries 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 INR 500 crores from Reliance Industries.
Embibe is an education platform that uses data analytics to deliver personalized learning outcomes for students. It targets various segments like K-12, higher education, professional skilling, vernacular languages, and all curriculum categories in India and abroad. Embibe uses AI stacks that focus on content intelligence and automation, behavioral recommendations, and student intelligence.
Aditi Avasthi, the founder and CEO of Embibe, continues to lead the company post acquisition and may operate it as an independent entity as well. With Embibe’s technology, Reliance aims to connect with over 1.9 million schools and 58,000 universities across India. It believes that Embibe’s highly experienced management team will help Reliance realize its vision for the education sector.
Fynd, the fashion ecommerce platform, was founded in 2012 by Farooq Adam, Harsh Shah, and Sreeraman MG. Fynd functions via an offline-to-online (O2O) model and directly sources products belonging to categories such as clothing, footwear, jewellery, and accessories from prominent brands to sell them in India. Fynd sources products from the outlets nearest to the customer to optimize delivery time. It has about 8,000 outlets on board for about 500 clients.
Reliance's latest acquisition, Fynd, has an in-house product called the ‘Fynd Store’; store managers place order on behalf of the 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 manages Fynd) for INR 295.25 crores ($41.9 million).
RIL also has an option to further invest INR 100 crores in Shopsense Retail Technologies by December 2021. The total investment will translate into an 87.6% stake in Fynd. The investment would strengthen the group’s 'digital and new commerce initiatives'. Reliance has been bolstering investments and acquisitions in the tech and internet space as it prepares to launch e-commerce services by leveraging Reliance Jio Infocomm's reach.
In February 2019, RIL’s wholly-owned subsidiary Reliance Industrial Investments and Holdings Limited (RIIHL) acquired equity shares of Grab A Grub Services Private Limited (Grab) in a cash deal worth $14.9 million. At a later stage, the company will also invest up to $5.63 million (INR 40 crores) 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 Amazon India and Flipkart.
Grab was founded in 2013 by Jignesh Patel, Nishant Vora, and Pratish Sanghvi. Grab provides services like on-demand deliveries, reverse deliveries, first mile, and last mile logistics. Some of its clients include McDonalds, BigBasket, Myntra, Amazon Now, and Swiggy. Grab 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 acquired artificial intelligence (AI) firm Haptik for INR 700 crores (with INR 230 crores as the consideration for the initial business transfer) to 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 coordinate with voice assistants to complete tasks related to online shopping, travel bookings, food delivery, and more. The company has worked with over 50 brands which include Samsung, Coca-Cola, Future Retail, KFC, Tata Group, Oyo Rooms, and the Mahindra Group. Haptik established its presence in the US in 2018 and in the UK in 2019.
With this startup acquisition, Reliance Jio is looking to leverage Haptik’s capabilities across various devices and touch-points in the consumer’s journey. Reliance said that the investment is an aid in the enhancement and expansion of Haptik's platform with an addressable market opportunity of over 1 billion users in India.
In April 2019, RIL acquired a majority stake in Reverie for INR 190 crores ($27.3 million). It will invest another INR 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 INR 267 crores 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. Companies can then use the resulting solution to engage with non-English speaking customers.
Reverie will work towards the integration of its Indic language localization services with RIL’s digital consumer platforms. It will continue to operate independently and serve its existing clients.
On March 23, 2018, RIL announced a strategic merger of its digital music service JioMusic with 'music over-the-top platform' Saavn. RIL acquired 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 million and Saavn at $330 million.
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 said while announcing the strategic transaction.
JioSaavn has over 200 employees and operates out of offices in California, New York, Bangalore, Gurgaon, and Mumbai. It offers about 40 million soundtracks in 15 languages and has over 900 label partnerships. Some of the partners are 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, the stake would be valued between INR 150 crores and INR 500 crores, a 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 will be compatible 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-registered, three international, and three India-registered patents.
Post-acquisition, Tesseract 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 and Hathway Cable & Datacom Ltd.
Reliance Jio bought a majority stake in Den Networks, Hathway Cable, and Datacom in October 2018. Jio acquired a 66 % stake in Den Networks with a primary investment of INR 2,045 crores and a 51.3 % stake in Hathway Cable & Datacom Ltd. with an initial investment of INR 2,940 crores.
DEN claims to have the ability to reach 9.7 lakh homes and 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 meant to boost the rollout of Jio GigaFiber which is in the testing phase at the moment. It is a competitor to Bharti Airtel, BSNL, and other broadband providers in India. Reliance Jio also has the wireless infrastructure assets of RCom to consolidate its telecom presence.
Reliance Industries completed the acquisition of British toy retailer Hamleys for about INR 620 crores (GBP 67.96 million) in an all-cash deal in July 2019 when Reliance Brands signed an agreement to acquire a 100% stake in Hamleys Global Holdings from Hong Kong-based C.banner International.
RIL stated that Reliance Brands 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 become a dominant player in the global toy retail industry.
Hamleys was founded by William Hamley in London in 1760. It is one of the world's oldest retailers of toys and has changed hands several times. Hamleys has 167 stores across 18 countries. In India, Reliance Retail had the master franchise for the brand and operated 88 stores across 29 cities.
On August 19, 2020, Reliance Industries Ltd. has acquired a majority stake in online pharmacy Netmeds for about $83 million (INR. 620 crores) 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.
According to Reliance, Netmeds would enhance Reliance Retail’s ability to provide affordable and extensive health care products and services.
"This investment is aligned with our commitment to provide digital access for everyone in India," said Isha Ambani, Director, RRVL
Netmeds is one of the top online pharmacies in India that deals with a wide range of healthcare products like high-quality prescription medicines, over-the-counter pharmaceuticals, general health care products, Ayurvedic medicines, and homeopathic medicines. It has delivery facilities across India. It is a subsidiary of Dadha & Company, one of India’s most trusted pharmacy brands with over 100 years of experience in dispensing quality medicines. Pradeep Dadha founded the company in 2010 and it is headquartered at Chennai, Tamil Nadu.
In December of 2019, 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 INR 23.12 crores. Asteria develops drone-based solutions to provide intelligence from aerial data for military use and industrial applications.
In December 2019, RSBVL also acquired a 85% stake in NowFloats Technologies Pvt. Ltd. for INR 141.63 crores with a proposal to make further investments of up to INR 75 crores. Nowfloats offers SaaS solutions to small and medium enterprises (SMEs) for building a digital presence. The investment will further enable Reliance group's digital and new commerce initiatives.
RIL also acquired open telecom solution provider Radisys in June 2020 for $74 million (INR 511 crores). The deal majorly focused on enhancing Reliance Jio's presence in the areas of 5G, Internet of Things (IoT), and open source architecture adoption.
In addition to these acquisitions, RIL specifically made deals 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 known for its EasyGov online portal which details government schemes and services to citizens. SankhyaSutra Labs offers high-performance computing software simulation services.
Balaji Telefilms and Eros International
RIL also invested in the entertainment industry. It acquired a 25% stake in film and television production house Balaji Telefilms Ltd., a.k.a ALTBalaji, in a deal worth INR 413.28 crores. The stake purchase will give Reliance Jio Infocomm Ltd. access to the content generated by Balaji Telefilms. RIL also acquired a 5% stake in the film entertainment company Eros International for $48.75 million. Given the massive demand for online video content, a stake in Eros International and ALTBalaji would allow Jio to entice customers who are in dire need of high speed internet on smartphones.
Reliance Retail bought 96% stake in Urban Ladder for over Rs 182 crore in November 2020.
Reliance Jio and other Reliance Industries' subsidiaries are likely to continue the acquisition trend to retain leadership in the market. But the results of the acquisitions are yet to be realized from an end user's perspective.