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Ambani’s Reliance to buy Google-backed Indian e-commerce startup
[TOKYO] Reliance Industries Ltd agreed to buy an Indian technology startup funded by Google, scooping up an inventory-management platform and adding to the list of smaller deals the conglomerate has assembled to take on Amazon.com Inc.
Billionaire Mukesh Ambani's group agreed to buy a controlling stake in Shopsense Retail Technologies Pvt, which operates the Fynd platform, according to a statement dated Aug. 2. The investment unit of Reliance will pay as much as 2.95 billion rupees (S$58 million) in cash, with an option to plow in a further 1 billion rupees. Once completed by December 2021, the total investment would translate to an 87.6 per cent stake, the company said.
Reliance is adding Fynd as part of its focus on consumer businesses and mobile phone services as growth areas for the sprawling energy-to-retail conglomerate. India's largest retailer has said it intends to transform itself from a grocery and neighborhood store-based empire to an online powerhouse as India becomes a battleground for giants such as Amazon.com Inc. and Walmart Inc.'s Flipkart Online Services Pvt.
Shopsense, which started out as an online fashion portal, has attracted investments from Alphabet Inc.'s Google, among others, and has shifted its focus to helping stores boost sales by managing inventory. Ambani has said the key to his e-commerce push will be empowering mom-and-pop retailers with technology to improve their sales and better serve customers.
The deal for Fynd, expected to be completed by December 2021, will enable the group's digital and new commerce initiatives, according to the statement. The transaction doesn't require regulatory approval, the company said.
Fynd, which was incorporated about seven years ago, had a 186.4 million rupee net loss in fiscal 2018 on sales of 48.4 million rupees, according to the statement.