Reliance acquires UrbanLadder
Now imagine reading the following headlines –
General Electric buys WhatsApp
Baidu acquired by PetroChina
We constantly look at the startup eco-systems in America and China and tend to compare ourselves with that. Imagine, General Electric was the largest acquirer in America or PetroChina was buying all the startups in China. That is not the case. Instead, you have Apple, Google, Facebook and Amazon in America; Alibaba and Tencent in China; all of whom are technology companies. Consequentially, they understand the nuances of technology. Further, they have assets that can leverage the acquisition immediately. This renders the acquisitions of greater value to them.
Now, think about Reliance. They are already trying to pivot from being an ancient world business to being a modern technology-driven business. For now, the Jio story is holding its own, but truly excelling in e-commerce or for that matter any product is years if not decades away. For a business such as Reliance, UrbanLadder does not offer much value because there is no immediate way to leverage the same.
In the past 25 years, India has not been able to produce a truly global consumer tech startup. Many of the startups that India did produce, remained focused on the Indian market because the investors kept telling them that India itself is a large market. This was their biggest undoing. If they were to focus on India, they needed to go local, double down on languages and develop depth. Instead, they kept, and continue to skim the metro cities and remain anglicised.
So we ended up with companies that were neither truly Indian nor global.
Who could have bought UrbanLadder? Flipkart? They had to themselves wave the white flag and get acquired by Walmart to ensure continued survival. Maybe Paytm, but their own e-commerce foray has not been a raging success to be able to leverage UrbanLadder. The fact that there is not even a third company that can be mentioned on that list is a cause for worry in and of itself.
Under such circumstances, the company got sold to Reliance for what would be chump change for them. The founders would have been nothing to show for the years they invested in the company. The investors were also forced to take a huge write-off on their investment. Everyone is a loser. Even Reliance which is not really in a position to take the company and run.
The only positive to come out of this are lessons. For founder, investors and the eco-system at large.