Reliance buys Haptik, Airbnb backs OYO as dealmaking in April takes off with a bang

Startup funding in the second quarter of the current calendar year opened on a strong note with as many as 17 companies raising $510 million across sectors such as co-working, e-commerce, hyperlocal and mobility. Funding aside, in a major development this week, Reliance Industries Ltd (RIL) extended its recent startup shopping spree with its acquisition of a controlling stake in Mumbai-based conversational artificial intelligence (AI) startup Haptik Inc.

The Big Deal

Ending months of speculation, San Francisco-based home-sharing marketplace Airbnb announced an investment in homegrown budget hospitality chain OYO, which is backed by Japanese internet and media conglomerate SoftBank Group Corp.

Read: Airbnb confirms investment in OYO

Airbnb said in a statement that it has pumped money into OYO, owned by Gurugram-based Oravel Stays Pvt. Ltd, as part of its Series E funding round. The company didn’t disclose the details of the investment.

In a report last month, subscription-based digital media publication The Information, citing people it did not name, had reported that Airbnb was in talks to invest up to $200 million in OYO.

The deal is interesting because Airbnb and OYO have been fairly fierce rivals who now see more merit in working together to find synergies, even as both seek to diversify away from their staple offerings into the larger hospitality sector. While OYO started out as an aggregator of rooms in budget hotels, it is now trying to transition into a full-scale hospitality company. Airbnb, whose staple has been home sharing, is also attempting to gain a foothold in the hotels business.

More money for fintech

Digital payments startup BharatPe, which serves offline retailers and businesses, raised an unusually large Series A round. It cornered $15.5 million (around Rs 107 crore) from new investor Insight Partners and existing investors Sequoia Capital India and Beenext. American Express top executive Sanjay Rishi and PayU co-founder Nitin Gupta also participated in the round. BharatPe competes with payments firm Paytm, Flipkart-owned PhonePe and Google Pay.

Another digital payments company, Mumbai-based Transerv Pvt. Ltd raised $6.7 million from Indiabulls Ventures Ltd to diversify its offerings in lending and payments solutions.

Deals in food-tech and e-commerce

Investor favourites food-tech and e-commerce, not surprisingly, found investors again this week -- both new and existing.

• Poncho Hospitality Pvt. Ltd, which provides on-demand food delivery service under the brand Box8, received $15 million in a Series C round led by Alibaba Group-backed technology vehicle eWTP Ecosystem Fund.
• Beauty e-tailer Nykaa raised Rs 100 crore ($14.4 million) in a fresh round of funding from US-based private equity firm TPG Growth.
• Lingerie e-tailer Zivame raised Rs 60 crore (around $8.6 million) in a bridge round of funding led by existing investor Zodius Technology Fund.
• Gurugram-based hyperlocal delivery platform Baxi Fresh (earlier Baxi) raised a bridge funding round from some of its existing angel investors.
• Iluminar Media Pvt. Ltd, which owns and operates curated local discovery and e-commerce platform Little Black Book (LBB), raised $5 million (Rs 34.5 crore) in a Series A round of funding led by Inventus India and IAN Fund.

B2B makes a dent

Lavelle Networks, which offers a networking platform for enterprises, raised $2 million in Series A funding led by YourNest Venture Capital. Existing investors Ideaspring Capital, KAAJ Ventures and ASM Technologies Ltd participated in the round.

Lavelle provides network-as-a-service using the cloud to automate and secure enterprise networks.

Consolidation

Earlier in the week, Reliance Industries Ltd agreed to acquire an 87% stake in AI-based conversational platform Haptik Inc. The transaction also involves Times Internet Ltd, which was until now Haptik's major investor, exiting the company.

Reliance, in a statement, said it will pay Rs 230 crore ($30 million) for the initial business transfer from Haptik to wholly-owned unit Reliance Jio Digital Services Ltd. The total transaction, which also includes a primary investment, is worth $100 million (Rs 688 crore).

For Haptik, the investment is likely to help scale up its operations. It will also provide the company with the resources to develop conversational AI technology across both enterprise and consumer product lines. Reliance Jio, on the other hand, is likely to leverage Haptik’s capabilities to embed the target company's virtual assistant across its own digital platforms including music streaming service JioSaavn, apart from messaging, video and other services that complement its mobile network.

In another M&A (merger and acquisition) deal, Redis Labs, a US-headquartered open-source firm which provides database management systems, bought a software tool built by Bengaluru-based startup HashedIn Technologies.