Reliance Retail Purchases 16% Stake in KaiOS Technologies for $7 Million

Reliance Retail, the parent company of Reliance Jio bought a stake of 16% in the KaiOS Technologies (KTI) a couple of days ago. The deal is worth about $7 million, and it’s an all-cash deal. On last Friday, Reliance Industries Limited (RIL) sent a notice to the Bombay Stock Exchange (BSE) that Reliance Retail (RRL) bought 19,04,781 shares of KTI at $3.675 per share. In the BSE filing, RIL stated the deal as “for cash aggregating to $7 million, translating to 16% equity stake of KTI on a fully diluted basis.”

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“The aforesaid investment has potential synergies with RRL’s current investments in affordable digital devices business and also with the digital services initiatives of RIL and its subsidiaries,” the company said in the statement.

For the unknown, KaiOS Technologies is the company which developed the KaiOS operating system for the popular Reliance JioPhone. And this investment will be a key step for the company to get more control over the software of the JioPhone. One of the key aspects of JioPhone is the support KaiOS operating system, and more recently, Jio managed to bring Facebook app support to the feature phone.

Reliance Industries is looking to replicate the success it achieved in the first phase of JioPhone roll out as the company managed to sell over 15 million JioPhones in just first three months. And the investment in KTI will enable the company to bring more apps to the platform, which would be a key for JioPhone going forward.

KaiOS Technologies is still in its nascent stages with a revenue of $9.25 million and $2.5 million in last two years. With RRL’s investment, KTI’s valuation increased close to $44 million. KaiOS is a feature phone operating system built on Firefox OS, and the best part is it’s Open Source like Android.

Also, Retail Retail is now the leading feature phone brand in India with shipments reaching sky high in the last quarter of 2017. In addition, the JioPhone is said to be manufactured in India very soon. At some point, it was even touted as Jio is scrapping the JioPhone in favour of a full-fledged Android smartphone, however, this investment from the company suggests that JioPhone is going to stay.

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9 Comments on "Reliance Retail Purchases 16% Stake in KaiOS Technologies for $7 Million"

 

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dragonmonk
March 12, 2018 11:44 pm 11:44 PM

Very smart move by Jio. KaiOS is also Nokia’s go-to choice for their upcoming 8110 4G phone – albeit with Nokia’s own App Store. There cannot be a better endorsement of KaiOS’ potential than from Nokia.

Pritam Das
March 12, 2018 10:19 pm 10:19 PM

Reliance should rather go with Android Go for JioPhone 2. This investment in KaiOS is probably not a good decision. Android could open JioPhone devices to the world of apps and wider content. But who knows, Reliance probably is willingly restricting JioPhone’s capabilities with a basic OS??!!

dragonmonk
March 12, 2018 11:41 pm 11:41 PM

You are correct about willingly restricting capabilities. This is because, battery life is the major concern. Even with Android Go, people are free to install any game or app from Play store – it’s just that the default Google apps are ‘light’ and a few third party apps also have light versions. Battery life consumption on KaiOS is negligible when compared to Android Go.

Pritam Das
March 13, 2018 5:36 am 5:36 AM

Yeah, good points. Also, JioPhone is still a phone with physical keyboard. Getting a Android Go will mean going full screen which probably will destroy the “smart feature phone” identity of JioPhone. Also not to mention the biggest attraction of JioPhone, its price will go up. Reliance now as an investor in KaiOS can optimize the OS even better for the specific JioPhone hardware.

dragonmonk
March 12, 2018 3:57 pm 3:57 PM

Clarification: KaiOS was not developed *for* JioPhone. KaiOS was developed and Reliance Jio happened to license it for use in JioPhone. The difference is important.

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