Back News / Reliance Industries in talks for majority stake in startup Grab
Reliance Industries in talks for majority stake in startup Grab
February 28, 2019BENGALURU: Reliance Industries (RIL) is in advanced discussions to buy a majority stake in Mumbai-based hyperlocal logistics startup Graba Grub Services, according to two sources familiar with the development. The move comes after the Mukesh Ambani-led company said earlier that it plans to enter the e-commerce space. While the size of the acquisition could not be ascertained, a deal could close in the next few weeks and also involve an investment to scale up the venture further.
Known as Grab, the startup provides third-party, last-mile logistics services for food delivery companies, online pharmacy and grocery delivery, among others. “Grab has been talking to potential suitors for the last six-seven months. The company had also held talks with Paytm for an acquisition,” said one of the sources mentioned earlier. An emailed query to RIL did not elicit a response till the time of going to press. When contacted, Grab co-founder Pratish Sanghvi declined to comment.
Grab has raised over Rs 30 crore from financial investors like Oliphans Capital, SIDBI and Sixth Sense Ventures, besides strategic backers like Zomato and Dubai-based logistics company Aramex. The startup was founded in 2014 by Sanghvi, Jignesh Patel and Nishant Vora. It has delivered over 127 million orders across 49 cities. The client list includes McDonald’s, Flipkart, Amazon, BigBasket and Big Bazaar. It has offices in Mumbai, Delhi, Ahmedabad and Bengaluru.
The acquisition, if it goes through, will help Reliance with a new commerce push, which is expected to be launched by telecom arm Reliance Jio and Reliance Retail. Ambani had said last year that the company plans an online-to-offline (O2O) approach to build this business, leveraging the customer base of Jio and retail business besides kirana stores.
Last month, Ambani had said the rollout of the business will start from Gujarat. “The new e-commerce platform will empower and enrich our 12 lakh small retailers and shopkeepers in Gujarat,” he had said. This is expected to pit Reliance against e-commerce giants Amazon and Walmart-owned Flipkart, who control 70-80% of the market right now.
Reliance has become increasingly active in making acquisitions and investments in the local startup ecosystem as it starts the next phase of expanding Jio into services. Last year, the company acquired music-streaming service Saavn and merged it with its JioMusic, valuing the combined unit at $1 billion. It also acquired education tech startup Embibe and committed to invest another $180 million in the company.
Earlier this month, it announced three deals, including acquisition of 83% stake in vernacular language services startup Reverie for Rs 190 crore with a further investment of Rs 77 crore.