FB Pixel no scriptWhy India's richest person Mukesh Ambani is betting on American futuristic mobility company SkyTran | KrASIA

Why India’s richest person Mukesh Ambani is betting on American futuristic mobility company SkyTran

Written by Moulishree Srivastava Published on   5 mins read

SkyTran offers driverless, taxi-like pods that can cut down passengers’ hour-long drive to just a few minutes.

Mukesh Ambani, 63, the richest Indian and chairman and managing director of the country’s largest company, Reliance Industries, is betting big on SkyTran, a US-based tech company that has developed a high-speed and economical personal rapid transit system.

Late last week, Mumbai-headquartered conglomerate’s wholly-owned subsidiary Reliance Strategic Business Ventures (RSBVL) put in a check of USD 26.76 million to almost double its stake in SkyTran to 54.46%.

The oil-to-retail conglomerate had set its eyes on this futuristic tech-mobility company in October 2018 when it bought a 12.7% stake in it. In April 2020, Reliance increased its stake to 26.31%. With the recent capital infusion, the Ambani-owned group has become the majority shareholder of SkyTran.

Jayanth Kolla, founder and partner, Convergence Catalyst, a Bengaluru-based business consultancy firm, said, even though SkyTran is one of the pioneers to create a futuristic alternative rapid transport company, it has a low valuation of less than USD 100 million.

“It makes sense for Reliance to pick it up. As a majority stakeholder, Reliance can now direct the strategic moves of SkyTran,” he told KrASIA.

What is SkyTran?

SkyTran offers driverless, taxi-like pods that can cut down passengers’ hour-long drive to just a few minutes. It employs passive magnetic levitation technology that allows these computer-controlled pods to run on an elevated, light-weight support infrastructure built a few feet above the road to bypass the traffic.

According to Ankur Bhatnagar, head SkyTran Initiative at Reliance, it quadruples the average travel speed at a lesser cost. Since SkyTran’s electric-pods use magnetic levitation tech, the company requires lesser energy and leaves little to no pollution behind.

“The beauty of SkyTran is that it doesn’t require more space. We put in two poles, only 18 inches wide, and those poles support the SkyTran systems. Moreover, SkyTran can go in and out of buildings so stations don’t have to be built,” Jerry Sanders, former CEO of SkyTran told local media Economic Times in a 2015 interview. “SkyTran costs around a fragment of the Chinese bullet trains and doesn’t need the exact magnetic power.”


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American aerospace engineer and inventor Douglas Malewicki first proposed the concept for SkyTran in 1990, which was taken up for development by Unimodal Systems Inc, a California-based firm. SkyTran was incorporated after the latter partnered with the National Aeronautics and Space Administration (NASA) in 2009. They developed a magnetic levitation and propulsion technology to create personal transportation systems, aiming to solve the global problem of traffic congestion on roads.

Headquartered at the NASA Ames Research Center near Mountain View, California, SkyTran is a NASA Space Act company. NASA uses Space Act agreements to partner with the community and offers private companies access to its technologies, expertise, assets, and information with its own core competencies. The company, which has done pilots with NASA and Israel Aerospace Industries (IAI), and counts Eric Schmidt, former executive chairman of Google, and Timothy Cook Draper, an American venture capital investor as backers, intends to revolutionize public transportation and, with it, urban and suburban commuting, according to NASA.

SkyTran has been eyeing India for pod taxis pilot since 2015 which is when it started gauging the Indian government’s interest while looking for a financial partner. In early 2017, the company was picked up as one of the three companies by the Indian government’s policy think tank Niti Aayog to test rapid transport systems on specific, pre-decided routes.

Reliance came into the picture one-and-a-half years later with its initial investment in SkyTran and began laying the foundation for its pilot in India. It strategically roped in Bhatnagar, SkyTran’s co-founder and India vice-president, who was with the company for over 16 years, to head its SkyTran Initiative.

What’s in there for Reliance?

Ambani’s vision with SkyTran is to build a highly efficient, ‘transportation-as-a-service’ platform for India and the rest of the world. SkyTran is different from public rapid transit systems like high-speed rail. The taxi pods reach passengers on demand and only stop at their chosen destination.

Announcing the deal, Ambani said, Reliance will invest in building futuristic technologies. “Our acquiring majority equity stake in skyTran reflects our commitment to invest in building futuristic technologies that would transform the world,” Ambani said in a statement.

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“We firmly believe that non-polluting high speed personal rapid transportation system will help facilitate environmental sustainability through efficient use of alternative energy and make an impactful reduction in air and noise pollution,” he added.

However, Reliance’s move to gobble up SkyTran goes beyond Ambani’s ambition to reduce global traffic congestion and pollution levels. In the recent investor presentation, the company said, it wants to be “India’s largest and most preferred provider of mobility, including EV charging and low-carbon solutions.”

According to Satish Meena, senior forecast analyst at Forrester, Reliance is looking to move away from its core oil and gas business toward future sources of energy.

“Reliance is still a predominantly energy company, and most of our energy is moving towards renewable and EVs. So they would like to move in that direction,” he told KrASIA. “They don’t see themselves selling petrol or diesel after 30 years. They want the company to be future-ready, and that is why they are focusing on renewables, EV batteries, etc.”

“But it is not like you can make a massive business out of just providing batteries, so either you provide the whole car, or you provide the whole infra around EV,” he said. “That is why they are looking at full-fledged services in EV, and SkyTran fits into the direction.”

He believes there is also a public transport angle into this.

“The infrastructure for rapid transport systems is going to be made in the public-private partnership, and Reliance has enough influence to set up a small pilot somewhere in Mumbai,” he said.

Kolla agrees. He believes the real game for a business house like Reliance in operating SkyTran is actually in infrastructure building. “By owning the technology, and the pod taxi transport system, the company will call shots on building the infrastructure, and that is where it has a big business to make,” he said.

Although it is still early for this future transportation system to materialize in the country, Meena feels Reliance is the only one that can influence the government to experiment with this.

“Reliance is not a company that plans slow. They can have this pilot up and running if they want,” he said.

Kolla added that since SkyTran has already been working with the government, having a majority stake would also help Reliance to compete with Hyperloop, a personal rapid transit system founded by SpaceX founder Elon Musk, which is growing fast and plans to launch in India soon.

Furthermore, SkyTran can help Reliance’s global aspirations.

“Reliance is one of the big Asian business houses, which does not have a relatively strong presence in global markets. With a company like SkyTran and its rapid transport tech, Reliance could potentially make inroads in global markets much faster,” Kolla feels.


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