MUMBAI : Reliance Industries Ltd’s retail arm has purchased a 55.7% stake in Addverb Technologies, a Noida-based robotics company, for $132 million. Post the transaction, Reliance Retail Ventures Ltd (RRVL) will have four directors on the board of Addverb of a total of nine directors, according to Sangeet Kumar, co-founder and chief executive of Addverb Technologies.
The remaining stake in Addverb will be held by the founders.
Mint was the first to report on 28 December on the investment talks between billionaire Mukesh Ambani-led Reliance Industries and Addverb.
“We, the founders of Addverb, were working for Asian Paints and used to visit many factories and warehouses the world over. We realized that every time we set up factories, there would be significant investments made, and many of the materials were procured from the US and Japan. We wondered why are we not making these in India as there is huge demand. That is when we realized that it is a big business opportunity, and we started Addverb," Sangeet Kumar, co-founder and chief executive of Addverb Technologies, said in an interview.
“Verb means action, and we added intelligence to action, deriving the name Addverb," said Kumar.
Kumar said Addverb will continue to operate independently and will use the fresh funds from RRVL to expand overseas and also build one of India’s biggest robotics manufacturing facilities in Noida.
The company currently has a manufacturing plant in Noida where it produces around 10,000 robots a year.
“With this investment, RRVL becomes the largest shareholder in the company. RIL was already a client with whom we had co-created and delivered highly automated warehouses for their Jio-Mart grocery business," said Kumar, adding that the company will be assisting RIL’s businesses in other subsidiaries too.
The investment in Addverb was made at a valuation of $265 million to $270 million, a company statement said.
“The strategic partnership with the RIL arm will help us leverage 5G, battery technology through new energy initiatives, advances in material sciences (carbon fibre) to deliver more advanced and affordable robots," Kumar said, adding that Addverb is a profitable company.
The company plans to close this financial year with revenues of ₹410 crore. It has a target to achieve annual revenue of ₹7,500 crore over the next five years.
Addverb currently generates 80% of its revenues from India, but the mix is expected to change to 50:50 between India and overseas business in the next four to five years. “Our revenues from software contribute 15% of the total, which is expected to grow significantly," said Kumar.
Addverb has a unit each in Singapore, the Netherlands, US and Australia. “Each of these subsidiaries will expand in terms of workforce. The manufacturing will happen in India, and our overseas subsidiary will help in designing the robots," Kumar said.
