US investment firm General Atlantic will invest INR 6600 Cr (around $870 Mn) in Mukesh Ambani-owned Reliance Jio Platforms, the companies announced on Sunday (May 17).
General Atlantic is investing INR 6,600 Cr in Jio Platforms for 1.34% stake in the company which operates Reliance Jio and other digital services businesses. “This investment values Jio Platforms at an equity value of ₹ 4.91 lakh crore and an enterprise value of ₹ 5.16 lakh crore,” said Jio Platforms. This investment continues to reaffirm Jio as a next-generation software product and platform company, the company said.
Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners, and Davis Polk & Wardwell acted as legal counsel. Paul, Weiss, Rifkind, Wharton & Garrison and Shardul Amarchand Mangaldas & Co. acted as legal counsel to General Atlantic.
Mukesh Ambani, chairman and managing director of Reliance Industries, said, “General Atlantic shares our vision of a Digital Society for India and strongly believes in the transformative power of digitization in enriching the lives of 1.3 Bn Indians. We are excited to leverage General Atlantic’s proven global expertise and strategic insights across 40 years of technology investing for the benefit of Jio.”
Akash Ambani, director of Reliance Jio, said that General Atlantic’s endorsement and partnership energises Jio’s young team to set, and achieve, even more, ambitious goals. Bill Ford, Chief Executive Officer of General Atlantic, said, “As long-term backers of global technology leaders and visionary entrepreneurs, we could not be more excited about investing in Jio. We share Mukesh’s conviction that digital connectivity has the potential to significantly accelerate the Indian economy and drive growth across the country.”
Jio Platforms has raised close to INR 60,596.37 Cr from technology investors like Facebook, Silver Lake, and Vista in the last three weeks. Facebook acquired a 9.99% stake in Jio Platforms with its INR 43,574 Cr ($5.7 Bn) investment, whereas Silver Lake as invested INR 5,655 Cr at an equity value of INR 4.90 Lakh Cr and an enterprise value of INR 5.15 Lakh Cr.
Vista will invest INR 11,367 Cr in Reliance Jio Platforms for a 2.32% equity stake at an equity value of INR 4.91 Lakh Cr, and an enterprise value of INR 5.16 Lakh Cr.
Reliance will be looking to use these investments to take over many tech sectors in the Indian market through its various arms and businesses. In 2019, Reliance started the pilot for the JioMart ecommerce venture, forayed into blockchain, mixed reality (AR+VR), IoT and OTT video streaming with the launch of Jio Fiber and partnered with Microsoft Azure to facilitate digitalisation and cloud computing for Indian businesses. Beyond broadband, it entered gated community management enabled through the Jio Fiber infrastructure, and it has envisioned a home entertainment ecosystem which touches Bollywood movie releases (first day, first show), virtual reality gaming, cloud-based game streaming, videoconferencing, home shopping and more.
Reliance and Reliance Jio also acquired 11 Indian tech startups in the period between 2018 to 2019, including C-Square, EasyGov, Embibe, Fynd, Grab, Haptik, Netradyne, Reverie, Saavn, SankhyaSutra, Nowfloats and Tesseract.
According to the Telecom Regulatory Authority of India’s (TRAI) report, Reliance Jio added over 6.55 Mn mobile phone users in January 2020, taking the total users to 376 Mn. The launch of Jio in September 2016 changed India and RIL fundamentally and perhaps permanently. From being a conglomerate largely focused on traditional sectors to a new-age tech and digital giant, Reliance Jio has also played a major role in bridging the urban-rural digital divide in the country.