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How Reliance’s latest startup bet Fynd aims to help Mukesh Ambani’s e-commerce vision

Sandeep Soni
reliance group, reliance infrastructure

What Fynd has built as a platform that connects ‘offline and online shopping’, very few platforms in India have built that as everybody knows that to move ahead in retail today, the only way is to integrate both online and offline as they independently won’t work, Google-backed Fynd -- offline to online e-commerce platform’s co-founder Harsh Shah told Financial Express Online. Fynd, which recently raised Rs 295 crore from Reliance, offers in-store fashion online by partnering directly with brands. Reliance, in its BSE filing on Friday, disclosed the investment adding that it has an option to invest an additional Rs 100 crore that will likely happen by December 2021.

Fynd also offers its open API for businesses to develop omnichannel retail apps. For instance, its APIs powers Google’s What’s In Store feature for shoppers to find out products stocked in stores near them. This along with their expertise in running an O2O model is what would help Reliance in its alleged upcoming e-commerce platform. “How does the technology work, supply chain work, customer experience and post-purchase experience work is critical to understand for an e-commerce venture. While these areas have been very well defined independently for both online and offline but very few have been able to combine both online and offline. Our capability and experience in how both works in a physical retail environment, in a website of a brand and of a third party as well are what would help Reliance,” said Shah. Reliance too echoed in the filing that the investment will further enable its 'digital and new commerce' initiatives.

Mukesh Ambani’s Reliance Industries has been acquiring or investing in around a dozen startups since approximately September 2018 that experts believed is to set up the digital infrastructure framework to become the e-commerce juggernaut and take on Amazon and Flipkart. “I think it is towards their (planned) e-commerce business. They (Reliance) they are trying to do which nobody in the world has done, that is a telecom player who is also building assets on the user engagement side. For instance, they acquired music streaming app Saavn and then they have JioCinema in content play and now looking into payments space through point of sale (PoS) business to onboard kirana merchants,” Madhukar Sinha, Founding Partner at India Quotient had told Financial Express Online.

For Reliance, it gives quick access to expertise in all these areas by partnering or acquiring such startups. “It is a question of capacity building, it takes years and manpower and money to do acquire that capacity that we have in the last six years along with the learning around it, whether it is about inventory, supply chain, fulfilment, post-purchase experience,” said Shah.

“Reliance has a traditional mindset which is very hard to change overnight. There has to be somebody to understand the next wave of technology, e-commerce, and AI-led growth. To build that in-house with such a mindset is not easy. Hence you go out to acquire or partner such companies,” Vikram Gupta, Founder and Managing Partner, Ivycap Ventures told Financial Express Online.

Fynd has ruled out the possibility of an acquisition by Reliance even as post additional Rs 100 crore investment, the latter would acquire a majority stake of around 87.6 per cent in Fynd. “The way we think about it is whether the market is saturated or not, it is not. With Reliance’s support, we would be able to scale higher. We have not built the company so far for an exit,” said Shah.

With the latest investment, Fynd’s existing investors including Google, Kae Capital and Venture Catalysts would exit the seven-year-old Fynd as it allocates 75 per cent of the capital raised towards technology and talent in India while the rest for international business. The company is targeting 10-15 per cent of online retail sales this year and 35-40 per cent in three-five years. India’s online retail sale stood at $32.7 billion in 2018 and is likely to grow more than double to $71.94 billion by 2022, as market research firm eMarketer.

Fynd's turnover for FY18 and FY17 stood at Rs 4.84 crore and Rs 0.70 crore against loss of Rs 18.64 crore and Rs 10.64 crore respectively for two financial years, Reliance's filing said.