What made Reliance buy Haptik for Rs 700 crore?

The digital world woke up to another interesting news yesterday evening. Reliance Jio Digital Services Limited (RJDSL), the subsidiary of Reliance Industries Limited, entered into a definitive business transfer agreement with one of the world's largest conversational AI platforms Haptik Infotech Pvt Ltd.

Haptik founded by Aakrit Vaish and Swapan Rajdev is a chat-based virtual concierge mobile application. It has processed more than 2 billion interactions till date, with a marquee client list that includes Samsung, Coca-Cola, Future Retail, KFC, Tata Group, Oyo Rooms, Mahindra Group, among others. The company focuses on key customer engagement use cases such as customer support, concierge, lead generation and live chat.

Haptik was the first company globally to open source a conversation-based Entity Detection engine and was recently awarded Frost & Sullivan’s Conversational AI Company of the year 2018. These credentials impressed upon Reliance and trusted that the purchase of Haptik will be a value-add for the company. Reliance views this investment as an opportunity to build India’s largest AI assistant company across chat, voice and vernacular languages.

The transaction size, including investment for growth and expansion, is estimated at about INR 700 Cr, with INR 230 Cr as the consideration for the initial business transfer. In April 2016, Haptik had raised capital from Times Internet who will exit the business as a part of this transaction.

The Haptik team will continue to drive the growth of the business, including the enterprise platform as well as digital consumer assistants. On a fully diluted basis Reliance will hold about ~87% of the business with the rest being held by Haptik founders and employees through stock option grants.

This transaction enables Reliance Jio to leverage Haptik’s capabilities across various devices and touch points in the consumer’s journey. The investment focus is on enhancement and expansion of the platform, with an addressable market opportunity of over 1 billion users in India. This partnership will also give a boost to Haptik’s existing enterprise grade business, with the company continuing to build innovative AI solutions for corporates globally.

Speaking on this strategic 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 in realizing this vision for offering greater connectivity and rich communication experiences to the billion+ Indian consumers.”

Aakrit Vaish, Co-Founder & CEO, Haptik expressed, “We started with the idea that conversational interfaces will cause a paradigm shift in the way people get things done. Over the course, we have built various products across both consumer and enterprise businesses, with the backbone always being a full stack chat and voice-enabled AI technology platform. We truly believe now is the opportunity to serve the next billion users who come online, and who better to partner with than one of the world’s largest digital ecosystems in Jio. We look forward to using this strategic opportunity to exponentially scale up the business across various product lines.”