Mukesh Ambani took the virtual center stage on Wednesday at the 43rd annual general meeting of Reliance and proclaimed that till a few decades back, Reliance itself was a startup and its less-than 4-years-old Jio is a startup. “I believe that there is no better partner for Indian startups than Jio,” said Ambani.
Essentially, as per definition and reality check, Jio has crossed success stories of the biggest as well as most successful startups, which became a unicorn and even rake 0.1% of the capital raised by Jio in these last four months. To put it into perspective, overall, the Indian startup ecosystem raised $58 Bn across 5,011 deals between 2014 to 2019.
In comparison, Reliance Jio has raised $20.2 Bn in 13 deals between April and July 2020— essentially, 35% of the total funding of the Indian startups in five years. The dream run for a startup, maybe?
Under definition by the Department for Promotion of Industry and Internal Trade (DPIIT), Jio also fails to be considered a startup— an entity is considered a startup till upto 10 years from its incorporation date and if an entity’s turnover for any of the financial years since its incorporation hasn’t exceeded INR 100 Cr.
Ideally, Jio fulfils the first condition, but the turnover is well-above INR 100 Cr. In FY20, Jio posted an 87.65% rise in standalone net profit at INR 5,562 Cr, as against INR 2964 in FY19, driven by continued subscriber additions and partial impact of tariff hike undertaken in Q3 FY20. Standalone total income was up 33.47% at INR 63,983 Cr in FY20 as compared to INR 47,935 Cr in FY19.
Clearly, Jio isn’t really a startup but it is definitely a kingmaker for startups and this is where Ambani wants to create Jio-startup connect. The company is being offered as the bridge which can help Indian startups scale-up, offer much-need exits to investors and also enable entrepreneurs to access a pool of capital to keep up their innovation, as clear from its recent acquisitions.
The Startup Connect For Jio
Emphasising the same, Ambani, addressing the shareholders and the public, said that the company is well-positioned to help Indian startups in a number of ways, whether it be in technology development, product development, distribution, market access or even scale-up capital.
“We are ready to integrate them into our roadmap and to help them reach their full potential. We believe that this would be the true measure of success for Jio to create a mighty Knowledge Coalition that solves Indian problems and opens the doors for many more companies from India to step successfully on to the global stage,” Ambani added.
Throughout his 60+ minute address, Ambani repeatedly said that Reliance Jio has several tie-ups with startups and is open to more partnerships. Talking about Reliance Retail, the next-investor interest product of the company, Ambani said that the company partners with farmers, small and medium-scale manufacturers, merchants, vendors, startups and global companies.
Sharing the 15-year vision of Reliance to be one of the world’s leading new energy and new materials company, Ambani said that it will be a platform which will execute its vision in a worldwide collaborative model. “This model envisages a large coalition of global financial investors, reputed technology partners and startups working on a futuristic solution,” he added.
Emphasising on the strategy to achieve this goal, Ambani said that Reliance will work with other Indian companies, including startups, to vigorously promote “Made-in-India”, “Made-for-India” and “Made-for-the-World” products.
Ambani shared that Jio Platforms, along with its over 20 startup partners, has built significant world-class capabilities in several cutting-edge technologies like 4G and 5G technologies, cloud computing, devices and operating systems, Big Data Analytics, Machine Learning and Artificial Intelligence, Virtual and Mixed Reality, Blockchain, Natural Language Understanding, Computer Vision etc.
The company also announced the Jio developer programme for applications on the Jio app store. Through the programme, app developers can develop, launch and monetise the app.
The Indian startup ecosystem has till now taken each process step-by-step, for different reasons. Essentially, when a business is launched starting with a problem statement, the founding team focuses first on solving the problem using technology and achieving product-market fit.
This is followed by early-stage funding and identification of the right mentorship to develop the product into a business. After early traction and several times cash burn, the business comes to the position of scaling and then the final jump of growth, along with larger funding and valuation.
But when in Jio’s case, the bundle it plans to offer and has offered till now has been the collective of these three— technology, business and scale, with the top-up of an unlimited pool of capital. The model has already seen success in countries like the US, but for India, it is still a larger dream come true.
There are attempts with platforms like Sequoia Surge— an accelerator programme offering branding, mentorship and capital— but still, it needs technology well-set to be able to add value with the business and scaling skills. Several other investors have also been trying to offer scaling opportunities or technology support like Google for Startups, but the bundling hasn’t yet reached the level which Jio offers.
Its acquisitions have offered bundled services, till now have very well complemented its scale of ambitions of ecommerce, deeptech, edtech. In several social media discussions, it has been pointed out that Jio merges all the ideas and solutions a startup has or can have to build in India. Hence, for every new sector or solution, Jio stands tall as competition, of course with the backing of larger technology giants like Google, Facebook, Microsoft etc as well.
As Jio calls on for startups to collaborate and leverage its technology pool, its coverage of the length and breadth of the Indian startup ecosystem has pros and cons. So are startups ready to challenge the mammoth ecosystem or look to join forces?