The AI Assistant That Can Help Mukesh Ambani Take On Siri And Alexa
The chat-bot venture Aakrit Vaish, 32, co-founded with his University of Illinois batchmate nearly ran out of cash about four years ago after an investor backed out at the last minute. Luckily, they found another one just in time, helping Haptik Infotech Pvt. Ltd. survive. The startup will now help power Asia’s richest man’s bid to take on Siri and Alexa in India.
Reliance Jio Digital Services Ltd., part of billionaire Mukesh Ambani’s telecom venture, bought 87 percent in the company for Rs 700 crore. Haptik founders and employees will hold the rest. It’s the biggest such deal involving an artificial intelligence-backed service in India.
The acquisition dovetails with the technology empire Ambani is building, a bet on India’s internet economy that, according to a Boston Consulting Group-TiE report, is estimated to grow to twice its size to $250 billion by 2020. His Reliance Jio Infocomm Ltd., which upended data tariffs in the world's second largest telecom market, offers everything from high-speed data and low-cost phones to online shopping, and music and video streaming services to more than 280 million users. Haptik will help add artificial intelligence-powered digital assistants in multiple languages to the company's services to begin with.
For the kind of service ecosystem Reliance Jio is building, they need a robust customer management system to increase their reach and remove any kind of barrier such as language, Hanish Bhatia, senior analyst with Counterpoint Research, said. “Haptik removes some of the barriers and complements their product strategy and will help Jio to widen its reach.”
Emailed queries to Reliance Industries Ltd., the parent of Reliance Jio, remained unanswered.
Vaish confirmed that the focus will be on how conversational artificial intelligence could be used across Reliance Jio's offerings. “For Saavn (music streaming service), it could make sense to put some of our capabilities, and the same goes for other products on Reliance platforms,” he told BloombergQuint over the phone. “The whole idea behind the investment by Reliance is to make things work together.”
Vaish and Swapan Rajdev founded Haptik in 2013 as a 24x7 personal virtual assistant platform for consumers to handle reminders, alarms, cab bookings and bill payments. “When we started our business, we were ahead of our time in terms of product and idea,” Vaish said. “And three times in our journey so far, we had to rethink what we are doing.”
They faced the toughest time yet in 2015. During the second fundraise, after much back and forth a venture capitalist agreed to plough money, but changed his mind later, Vaish told BloombergQuint over the phone. “That was a defeating moment, after trying months. I sat down and reflected what’s happening. We only had two months of money left.”
Times Internet Ltd., part of the media group that publishes the Times of India newspaper, bailed them out, pumping in about $11 million.
Consumers To Businesses
In 2017, Haptik pivoted to provide services to only businesses. “We took a pause and realised that there wasn’t much of a market in consumers,” said Vaish. The same year, it licensed its product to Coca-Cola India for customer support. Haptik now offers virtual concierge applications to Future Retail, Grofers, Oyo, Club Mahindra, IIFL, Dr Lal Path Labs and Tata Group, among others.
But it’s not profitable yet. The company reported a revenue of Rs 4.6 crore and a loss of Rs 22.5 crore in the year ended March 2018, according to filings made with the Registrar of Companies.
“In last five years we did a bunch of trial-and-errors, launching various business models,” Vaish said. “It is only in the last couple of years we started to see some scale, as we shifted focus towards enterprise clients.”
He thinks the market is now ready. Earlier this year, the startup launched a bot for KFC India, which allows users to place orders for delivery using Amazon’s Alexa. The market, which Grand View Research expects to reach $31.82 billion by 2025, is dominated by Alexa, Google’s Assistant and Apple’s Siri.
While Vaish didn’t comment on building smart speakers, he said as far as products and applications are concerned anything and everything is on the table. “There are certain types of applications and devices that are out there in the market and are doing good. We will look at it if there is demand, and we will do whatever make sense for the market.”
Prior to the takeover by Reliance, Haptik had raised $12 million. Now, it has enough cash to experiment. Reliance paid close to Rs 230 crore to buy out existing shareholders, including Bennett Coleman and Company Ltd. (Times Group). The startup will also get Rs 470 crore in fresh equity from Reliance to build technology in artificial intelligence and machine learning, with a heavy focus on vernacular languages.
While over the last couple of years, a bunch of AI-based assistants such as dhee.ai, FrontdeskAI, Liv.AI—acquired by Flipkart—came up, it's still an unchartered territory.
The industry is in an evolving phase, said Faisal Kawoosa, founder and chief analyst at techARC, a technology research firm. “It’s hard to define product maturity by any player at this point in time.”
Even Reliance Jio is yet to show its tech capability, he said. “Beyond mobile phones, we haven't seen anything constructive from Jio,” he said. “Conceptually, it looks it is heading towards a big opportunity, but how it grabs the opportunity is to be seen.”