Reliance Industries jumps on the blockchain bandwagon with investment in Shell and BP-backed Vakt

Indian energy and telecom behemoth Reliance Industries has acquired 5.56% equity stake in Vakt Holdings Limited (VHL), a blockchain-based startup.

Vakt is a blockchain-based post-trade processing platform backed by energy majors BP, Shell and Statoil; trading houses Gunvor, Koch Supply & Trading, and Mercuria; and banks ABN Amro, ING and Societe Generale. It was created and launched as an independent company in December 2017.

The initiative was formed with “vision to digitise the global commodities trading industry, creating a secure, trusted ecosystem, powered by block chain,” Reliance noted.

The investment plans were first revealed in July of this year, when Reliance said, “The said investment is subject to completion of due diligence and negotiation of definitive documentation.” In its latest official announcement, Reliance said that it has acquired 5.56% equity stake (on fully diluted basis) in Vakt for $5 million.

“The strategic investment accelerates Reliance's digital journey, through active participation in an emerging and evolving, yet promising, block chain enabled technology solution for energy markets,” it said. “No regulatory approvals were required for the said acquisition of shares.”

The investment marks Reliance’s first ever investment in blockchain-focused firm, according to The Economic Times. Led by Mukesh Ambani, the company now plans to establish a dedicated team for cutting-edge technologies such as the blockchain, machine learning, and artificial intelligence (AI).

The blockchain-based platform went live last month. According to Reuters, the platform will initially be opened only to member companies and will be opened up to others only in January 2019.