Reliance Industries Ltd's fascination with the startup space continues. And this time, it comes in the form of a strategic investment of Rs 700 crore (about $100 million) in enterprise conversational AI startup Haptik by telecom giant Reliance Jio for around 87 percent stake.
Of the total investment, Rs 230 crore will go for the initial business transfer. On a fully diluted basis, Reliance Industries will hold about 87 percent of the business with the rest being held by Haptik founders and employees through stock option grants, Haptik said in a release.
Speaking on the investment, Akash Ambani, Director, Reliance Jio, said,
"This strategic investment underlines our commitment to further boost the digital ecosystem and provide Indian users conversational AI enabled devices with multi-lingual capabilities. We believe voice interactivity will be the primary mode of interaction for Digital India. We are delighted to announce this partnership, and look forward to working with the experienced team of Haptik.”
With the investment, Haptik’s existing shareholder - Times Internet - will exit the company. As part of the investment, Haptik's business and holdings will be transferred to a new company - Reliance Jio Digital Services Limited - but products will continue to be branded as Haptik. In future, however, Haptik could use the Reliance brand name.
Why Reliance?
Speaking on the stake acquisition, Haptik Co-founder Aakrit Vaish says,
“This investment by Reliance Jio offers us a unique opportunity to massively scale up our operations and make a significantly greater impact in the conversational AI space. It will provide us with the resources and the support to develop world class conversational AI technology across both enterprise and consumer product lines.”
The deal clearly gives Haptik three key advantages:
1. Platform: Haptik will get access to the Reliance Jio platform, and its existing customerbase of over 300 million
2. Capital: Growth capital as well as resources to meet current and future plans
3. Vision alignment: The stake acquisition by Reliance Jio will align Haptik with the former's vision to touch 1 billion customers
Haptik's co-founders and employees will hold minority interest in Reliance Jio Digital Services. The Mumbai-based company will operate independently with its own culture, vision, and brand led by Co-founders Aakrit and Swapan Rajdev.
The Haptik team will also continue to drive growth of the business, including the enterprise platform as well as digital consumer assistants, the release said.
Aakrit added that the company’s vision to become the world’s largest conversational AI company remains. He said conversational AI, being a deep technology, needs patient capital. “Reliance is one of those very few large companies that have such a big vision. The pace, belief, and understanding they have in conversational AI is unparalleled, and even beats many large global giants. It, therefore, made great synergic sense to work with Reliance.”