Mukesh Ambani-led Reliance has been on a tech investment spree with firms like Fynd and Asteria, and though it’s not out in the open, the pattern similar to Amazon’s investment approach suggests the Indian Mogul is gearing up to challenge Jeff Bezos’s monopoly in the e-commerce domain.
Mukesh Ambani’s wealth grew a whopping $ 18 billion in 2019. That’s the biggest gain among all of the world’s super-rich. Indeed, in past couple of years Reliance products like Jio reached unprecedented success. Jio now has one of the biggest telecom customer bases in the world.
Heads Up! Fynd, Asteria and Reliance’s challenge to Amazon’s Monopoly
- Reliance’s recent start-up investment spree
- Mukesh Ambani’s new vision for Reliance
- How the pattern is similar to Jeff Bezos’ approach at Amazon
- Indian market analysts back Mukesh Ambani’s vision
- Reliance Jio’s battle cry to dethrone Amazon from the top of the e-commerce pyramid
Now, as the next step of his domination plan, Mukesh Ambani’s Reliance is on a start-up investment spree. Since 2017, Mukesh Ambani and Reliance have invested in more than 20 innovative tech start-ups. The period has been extremely busy for the Reliance M&A squad and from the first look it seems like a sound angel investment strategy.
Since 2017, Mukesh Ambani’s Reliance has invested in more than 20 innovative tech start-ups.
But a close look reveals a larger plan for Reliance. A plan where Mukesh Ambani is determined to end the American e-commerce monopoly, at least in India. Jio is firmly rooted across the Indian geography now. Consequently, Ambani-led Reliance is using Amazon’s tech acquisition strategy to turn the tables.
From start-up to start-up, from strength to strength
The investments have been coming in rapidly, and Reliance has been adding new products to its e-commerce umbrella. Furthermore, the pilot for e-commerce services is already underway.
Major investments in companies similar to what Amazon did. Its investments fortify evidence that Reliance has big e-commerce plans for 2020 and beyond.
Among the biggest names that stand out are the drone startup Asteria Aerospace, SaaS firm NowFloats Technologies, AI platform Haptik and offline-to-online retail enabler platform Fynd.
Ambani commands more than 51 per cent stake in Asteria Aerospace. With drones being a big part of e-commerce delivery process nowadays, Asteria is set for more backing by Reliance. Ambani plans to amplify investment and take the share to 87% with another INR 125 crore investment by 2021 end.
Asteria’s services will be helpful for Reliance to match Amazon’s tech expertise in delivery. It will also come to worth for its Oil and Mining interests. One of Asteria’s core services is offering drone-based survey, inspection and monitoring of oil and gas, and mining assets.
Reliance acquired a stake in Haptik which first and foremost helped Jio create its own music platform coupled with Saavn investment. Haptik’s conversational AI platform is currently used by Samsung, Coca-Cola, Future Retail, KFC, Tata Group, Oyo Rooms and Mahindra Group.
With Haptik, Reliance merged its JioMusic with Saavn OTT platform. As per ET, the combined entity is now worth over $ 1 billion. With Haptik, JioSaavn now has the product expertise to match up to rivals like Amazon Music, Apple Music and Gaana. Coincidentally, JioSaavn also lends its services to Amazon Alexa’s India version.
Mukesh Ambani and Reliance also invested in Fynd in August 2019. The investment to the tune of INR 295 crore was made through the Industrial Investments & Holdings arm. While the founders of Fynd, Harsh Shah, Farooq Adam and Sreeraman Mohan Girija are still a part of the company, early investors including Google and Kae Capital exited as part of the deal.
Reliance also has a proposed future investment option of INR 100 crore by 2021 end, similar to its Asteria deal. The investment will take Reliance’s total stake in Fynd to 87 per cent. As per industry experts, Fynd and also Asteria are crucial to Reliance’s future setup. Buying capability is part of the plan to challenge Amazon’s monopoly in the Indian e-commerce market.
Taking the Amazon Approach to challenge its Monopoly
In the almost 20 years, Bezos-led Amazon has invested in or bought at least 128 businesses. Buying out rivals and also investing in technologies to aid growth is at the centre of Amazon’s strategy. Jeremy Levine, Partner at VC firm Bessemer Venture Partners explains, “When Amazon decides it wants to win something and the market’s important to it, it will try to compete. If it can’t, it will ultimately buy the leader.”
Amazon’s invested in robotics startups. It bought KIVA Systems for $775 million and revamped its warehousing and fulfilment strategy, cut costs and increase margins. Similarly, Amazon bought stakes in scores of AI companies like Harvest, Angel, Mara, and Trackr among others. They have all been crucial in the success of Amazon Alexa.
India is backing Ambani’s E-commerce Ambitions
It looks like Mukesh Ambani is heavily invested in building up the capability. Reliance aims to dethrone Amazon from the top of the e-commerce pyramid in India. So much so that the company has shelled out $ 50 billion in making Jio India’s telecom leader in less than 3 years. Moreover, Jio’s 350 million customers along with investments like Fynd and Asteria now set it up with headway in the e-commerce battle against Amazon.
Jio’s 350 million customers along with investments like Fynd and Asteria set up Reliance for the e-commerce battle against Amazon.
Furthermore, Reliance’s push and clear vision has the backing of the Indian markets and investors. Chakri Lokapriya, Chief Investment Officer, TCG Asset Management recently opined, “Mukesh Ambani changed the narrative for Reliance Industries as a leader not just in oil and gas but also in telecom and retail, and possibly soon in e-commerce as well. We believe this can potentially double shareholder value over the next four years.”
As per Market analysis, the new vision will make up for at least half of Reliance’s total revenue in future. In fact, digital and telecom currently combine for 32 per cent of Reliance’s net revenue. Furthermore, Mukesh Ambani is also on a mission to make Reliance debt-free in a couple of years.