Weekly Update July 18 - The Reliance Bundle
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Do you know much about the Indian company Reliance, owned by one of the richest families in the world?
I read the biography about the Ambani family called “Ambani & Sons” a couple of years ago. At the time, I never thought this old-school petrochemical company would have any major relevance in my professional sphere of tech.
Well, I was wrong…and yesterday, I found myself sitting through an entire two hour presentation from the company.
Why? Because Reliance might become one of the most important tech companies in the world.
On July 15, Reliance Industries Limited hosted their 43rd Annual General Meeting (AGM). Because of the coronavirus, the event was virtual and livestreamed on Youtube:
If you’re used to watching the conferences of major Western tech companies, you might find Reliance’s AGM less flashy than Apple WWDC or Google I/O or Facebook F8. What you will see, however, is a company with a similar scale of ambition and perhaps an even grander vision for the future.
Reliance is one of the largest companies in India, a multi-faceted conglomerate that has been around since the 1970s. The company started in textiles then expanded into petrochemicals, retail, telecommunications, and more.
Reliance’s latest company spin-off Jio is a telco/digital platform that has gained hundreds of millions of users over the last five years and was the recipient of $20 Billion in investment over the last five months. The investors are some of the most prominent companies in the world, including Facebook, Google, and KKR.
Some key points from Reliance’s AGM:
Reliance is creating their own 5G technology, 100% homegrown and developed in India with the intention to export the tech globally.
Reliance is creating Jio Glass - mixed reality glasses similar to Snapchat’s Spectacles.
Reliance is creating Jio Meet - “India’s own most secure video conferencing platform,” a competitor to Zoom.
JioMart, Reliance’s online grocery delivery and e-commerce platform, is expanding aggressively into several retail categories.
A partnership between WhatsApp + JioMart for millions of Indian SMBs.
A partnership with Google to build new Android-based affordable smartphones.
Reliance currently reaches 800 million people through their media and entertainment properties.
Reliance has new investments in education, healthcare, and charitable causes.
Speeches by Mark Zuckerberg, CEO of Facebook, and Sundar Pichai, CEO of Google.
By the end of the two-hour long presentation, I felt that I had just watched one of the most impressive companies in Asia. Although primarily an Indian company, their incredible reach leaves them in such a strong position globally.
Notably, Facebook has a lot to gain from their new partnership with Reliance.
Facebook has a deep interest in India. Just a few years ago, Facebook created Internet.org, an organisation that aimed to provide free internet and services to people across several emerging markets. In India, Facebook partnered with several local companies at the time to launch Internet.org, including Reliance.
The goal was to connect the hundreds of millions of unconnected people in India, generally from more rural and poorer areas. But Internet.org also received tons of criticism. The way the program worked was that people would be able to download ‘Free Basics,’ which was a set of free apps and services (including Facebook) that would allow people to access the internet.
Many people, both in India and elsewhere, took issue with the fact Facebook would be deciding which apps and services to include in the package, accusing the company of violating net neutrality and utilising anti-competitive practices. At the time, there was significant controversy and the program ended up being cancelled in India.
Disclaimer: I was working for Facebook when the Internet.org debate in India was most active and have direct personal experiences on the topic.
For Facebook, their investment in Reliance this year is the most significant thing they have done in India since Internet.org. Regardless of the (often) negative press on Facebook, their single biggest market for users is India. And it’s the same for WhatsApp, which is owned by Facebook and has 400 Million Indian users.
India has always been one of the most strategically important countries for Facebook. I remember when I worked at Facebook, we even had Indian Prime Minister Narendra Modi come speak at our Menlo Park headquarters.
This alliance with Reliance is hugely beneficial to Facebook, considering the bruises Facebook received just a few years ago through Internet.org. The initial WhatsApp + JioMart project is really just one example of the many many ways that Facebook and Reliance could work together. And the same can be said for Google.
If you look at Reliance, you see a company with one of the biggest chances for success to capture the value of India’s digital economy. In the AGM video, they featured testimonials from several prominent investors saying how the Reliance opportunity was an important bet on the future of India.
Investing in Reliance is like investing in the equivalent of AT&T in the US, or Sky in the UK. But unlike AT&T or Sky, Reliance is even bigger, even more diversified, and has a much bigger potential market with India’s 1.3 billion people.
Mukesh Ambani, Chairman of Reliance, is not only the richest man in Asia, but more importantly the richest man in India. The reason I say that is because all this is happening against the backdrop of Indian-Chinese political conflict, which caused the Indian government to ban 59 prominent Chinese mobile apps two weeks ago and consider even more restrictive policies against Chinese business. In this economic power vacuum, Reliance is positioned to be one of the biggest beneficiaries.
At many times through the AGM, Ambani and his colleagues reiterated their dream to build a brighter future for India, and repeatedly referenced Prime Minister Modi. The fact that Reliance is building its own proprietary 5G technology will be a huge source of pride for India.
If you look at the history of India’s technology industry, the country has not yet produced many tech companies at the level of Silicon Valley. While India has roughly the same population as China, prominent Chinese tech companies (Alibaba, Tencent, Bytedance, etc.) do not have Indian counterparts with similar levels of success.
India is the largest exporter of talent to the US, both in terms of work visas and student visas. In world where recent policies has made getting US visas even harder, India might become the country that receives the largest ‘Brain Gain’ of returnees.
Mukesh Ambani was telling the story of how Reliance’s goal to become a world-class technology company is directly intertwined with the dream of a more prosperous India. If he can successfully sell that dream, Reliance will become an even more attractive place to work for India’s best and brightest.
Of course, success is not guaranteed. Reliance’s size and funding does not mean the company can automatically overcome smaller, nimbler startups or even their well-funded competitors in the market across several business verticals.
But for now—their war chest, their strategic partners, and their diversification make Reliance one of the most important companies in Asia.
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