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How Reliance is making use of start-ups, from Jio Phone to retail technology

LiveMint logoLiveMint 06-08-2017 Kalpana Pathak

Mumbai: Reliance Industries Ltd’s push forward in new areas such as telecom and retail is being helped in part by the start-ups it’s helping incubate.

Take for instance, the Jio Phone, Reliance Jio Infocomm Ltd’s new introduction to target the 500-million-strong feature phone market and the cornerstone of the telecom operator’s strategy to expand its user base.

The web browser for the Rs1,500 Jio Phone was designed by a start-up named Widely that is being mentored at GenNext Hub, the start-up platform RIL launched with Microsoft Ventures in 2014. So far, 52 firms have graduated from the hub, while 11 companies are currently being mentored there. 

“It’s an equity-free model,” said Amey Mashelkar, mentor-in-residence, at GenNext Hub. “The agreement that we sign with them (the start-ups) says we have an option (and not a right) to invest. And they have an option to take money from us. In fact, many start-ups come to us for the mentoring (rather) than for funding." 

For a start-up, the journey at the hub is a four-month affair where they are guided with clear metrics on what they need to achieve at the end of the programme. The final stage is making pitches and raising funds. The start-ups however, don’t need to part with their equity or pay any fee to the accelerator other than bearing their own travel and accommodation expenses while undergoing the programme. GenNext Hub runs two programmes—Scalerator for product-market fit for start-ups looking to scale up and Accelerator for concept-stage or product-ready start-ups looking for a market. 

In the 2016 annual general meeting, RIL chairman Mukesh Ambani announced that it would be launching a Rs5,000 crore start-up fund called Jio Digital India Startup Fund to invest in digital businesses. However, work on that front is yet to begin. 

“We are thinking through those plans. Logistics is a big issue. Also, getting top-notch quality mentors is a challenge so we have to figure out a good hybrid model. Complete virtual training is not the best possible way,” said a spokesperson for Reliance Industries. 

To be sure, many of India's largest conglomerates, from the Aditya Birla group to the Tatas, are working with start-ups to prepare for the future. For start-ups, apart from the mentoring, it is an opportunity to work with one of India’s largest companies, something that would otherwise have been difficult for them. 

Consider HeadSpin, a start-up that allows the testing and monitoring of apps on cell networks across the globe without adding any code. It set up a network testing farm at GenNext Hub which helped technology companies across the world to test their apps’ performance on the Reliance Jio network remotely. 

“We first worked closely with the Jio app teams to get three proof-of-concept projects which were executed for three months from May to July 2016. The successful pilots paved the way for the partnership,” said Manish Lachwani, chief executive and co-founder of HeadSpin. 

Telecom is not the only area of partnership. A start-up called DSYH (Don’t Scratch Your Head) had made a software that allowed real-time reconciliation of accounts in online marketplaces like Amazon and Flipkart. 

When they joined the start-up programme, “we introduced them to our Reliance Retail team. DSYH came on a pilot basis and were able to reconcile accounts with Amazon and now that pilot has converted into a full-fledged contract and they are also doing it for other RIL brands," said Mashelkar. 

While the Rs5,000 crore start-up fund might take some time, RIL is planning to take some of these companies and provide them with a launch pad in Silicon Valley or the UK, he said. 

“We are trying to figure out a programme through some partnerships in the Valley and see if we can take some of the B2B enterprise software with niche application areas and help them launch in the North American market as that is where they can get traction and that is where they will get access to large technology partners like Google, Facebook, etc., and also access to large amount of venture capital if they were to raise money for serving that market,” said Mashelkar.

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