As Reliance Industries Limited turned net-debt free, Mukesh Ambani’s fundraising acumen for Jio Platforms has become the hot topic of discussion in an otherwise bleak investment market. In just over two months, Jio Platforms has raised more capital than all Indian startups combined in all of 2019.
Reliance Industries Limited’s digital venture Jio Platforms managed to raise over $15.2 Bn (INR 1.15 Lakh Cr) for less than a quarter of its business in just two months, while in 2019 the entire startup ecosystem raised $12.7 Bn, as per DataLabs analysis.
Overall, the Indian startup ecosystem raised $58 Bn across 5,011 deals between 2014 to 2019. Jio Platforms managed to raise almost 26% of that with $15.2 Bn from April this year.
Jio Platforms, which runs Reliance Jio, Jio Fiber, all the Jio apps and services, started off its investment streak with Facebook, which poured in $5.7 Bn in exchange for 9.99% of stake in the company.
At that time, Reliance Industries, in the Bombay Stock Exchange (BSE) filings, had boasted about this being the largest investment for a minority stake by a technology company anywhere in the world and also the largest foreign direct investment (FDI) in the technology sector in India.
With that, Reliance’s Jio Platform raised investment from over nine other leading global investors like Silver Lakes, General Atlantic, KKR, TPG Capital, Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company, L Catterton and Vista Equity Partner. Besides this, Reliance Retail also raised INR 53,124 Cr ($6.9 Bn) through a rights issue in the last two months, taking the amount to INR 1,68,818 Cr ($22 Bn). But it’s Reliance Jio that should be of key interest to the tech community.
The Reliance Jio Digital Empire
In 2016, with the launch of Reliance Jio, it also became the face of digital India. Reliance Jio and the company’s various digital businesses were clubbed under Jio Platforms late last year. In the last four years, Jio has added dozens of products and services centred around 4G services and home broadband, including JioSaavn, JioTV, JioCinema, JioMoney, JioNews, Ajio, and even launched a video conferencing product JioMeet to meet the growing demand, among others.
“It (RIL) will be known in the coming decade as an enterprise with lakhs of partners, supporting the small and young entrepreneurs and an enabler of a large ecosystem of entrepreneurs in India.” Reliance chairman Mukesh Ambani, 2017.
While we had little idea of Ambani’s ambitions then, the game plan became clearer with time. In 2018, Reliance announced plans for a new phygital (physical + digital) commerce venture to harness its existing retail base of 350 Mn footfalls at its various stores, over 300 Mn Jio connectivity customers and 30 Mn small merchants all over India.
“Our new commerce platform will redefine retail in India by enabling all customers ─ rich or poor, whether at home or on mobile ─ to transition from simple shopping to personalised immersive shopping experience,” Ambani said.
In the background, while it plotted this vast empire, Reliance and Reliance Jio 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.
Interestingly, Jio Platforms, which was founded in 2019 as an umbrella company for Reliance Industries’ all digital ventures, had marked its presence over major consumer sectors in India. Reliance Jio, which is currently the largest telecom network, is the spearhead of this package. The telecom network, alone, has over 32% market share and over 388 Mn subscribers.
Whether it’s the grocery segment with JioMart, Ajio for fashion ecommerce, Reliance Digital for digital services and electronics, video conferencing with JioMeet, JioSaavn for music streaming, JioTV and JioCinema for videos and movies, JioMoney and Jio Payments Bank and Jio UPI ID for fintech or JioNews — Jio has a hand in it all.
Here Are The 10 Investors Currently Holding 24.6% Stake In Jio Platforms
One of the largest Silicon Valley companies, Facebook is no stranger to inorganic growth through acquisitions and investments in startups. From WhatsApp and Instagram to Oculus and Giphy, Facebook has not shied away from the big money deals when it sees an opportunity.
Overall, the company has acquired over 85 other ventures over the years including Little Eye Labs in India.
Facebook has also backed close to 24 startups across the world to enhance its products, services and reach over different segments. This includes edtech platforms BYJU’S and Unacademy, as well as social commerce company Meesho in India. In general, Facebook is known to have vast data on consumer behaviour, and habits, but this has also brought up controversies The company has been accused of not only using the data to push for targetted ads for propaganda campaigns, but also influence campaigns for social causes and election campaigns.
The Facebook-Jio Deal, which started off the funding streak in Reliance Jio Platforms, is undoubtedly been a point of contention for many of their competitors, who believe it will have a negative impact on the competition because of vast data empires both companies have.
A private equity firm based in California, Silver Lake was established in 1999 by David Roux, Glenn Hutchins, Jim Davidson and Roger McNamee to focus on large-scale investments in leading technology companies. The company has made 68 investments so far, of which it has led 39 rounds.
The PE firm has approximately $40 Bn as combined assets under management and committed capital. It’s portfolio includes Airbnb, Alibaba, ANT Financial, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and more. Silver Lake has had 26 exits from companies Alibaba Group, Motorola Solutions, Groupon, Vantage Share, GoDaddy, and Expedia. Silver Lake has closed over five funds so far, and is reportedly preparing for Fund VI soon. It had raised $15 Bn from investors in 2017 for its fifth buyout fund.
Vista Equity Partners is another US-based private equity and venture capital firm that has backed Jio Platforms in the past two months. It invests in enterprise software, data and technology-enabled companies. The company has more than $57 Bn in cumulative capital commitments, and its global network of companies collectively represent the fifth largest enterprise software company in the world.
It follows four investment approaches — private equity, permanent capital, credit and public equity. It has made more than 440 private equity transactions since its inception in 2000 by American businessman and investor Robert F. Smith and Brian Sheth.
So far, it has invested more than $21.6 Bn across 60 companies with a user base of 200 mn and 70K employees across the world. In India, its portfolio companies such as Accelya, Acquia, Advanced, Finastra and others have over 13,000 employees. Its portfolio includes AGDat, Eagleview, Kazoo, Upside and Greenway. Vista has acquired around 67 companies, of which HRtech platform iCIMS and CRM management company DealSocket were acquired this year.
A noted startup investor, General Atlantic provides capital and strategic support to growth companies across healthcare, ecommerce, internet, financial services, IT, enterprise software, and retail sectors, among others. The firm was founded in 1980 by billionaire Charles F. Feeney, who is also the cofounder of Duty Free Shoppers.
General Atlantic has over 400 employees across the world, and more than 100 investment professionals based in New York, Amsterdam, Beijing, Greenwich, Hong Kong, London, Mumbai and other cities.
The company has had over 374 growth investments overall, and has over $35 Bn assets under management. Its portfolio includes tech giants like AppsFlyer, Syska LED Lights, ByteDance, Slack and Uber. In India, it has invested in NoBrokers, Unacademy, BYJU’s and Housing.com, besides Reliance Jio.
Founded in 1976 by Henry Kravis, George R. Roberts and Jerome Kohlberg Jr, KKR is a global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit and hedge funds through its strategic partners.
Its portfolio includes American enterprise software company BMC Software, TikTok’s parent company ByteDance and on-demand multi-service platform GoJek. KKR invested in Reliance Jio through its Asia private equity and growth technology funds.
The first of three sovereign funds to invest in Reliance Jio Platforms, Mubadala’s investments are managed by the United Arab Emirates. The state fund has invested in more 57 projects and companies across 50 countries.
Mubadala has expanded its presence across aerospace, information and communications technology, real estate and infrastructure, petroleum and petrochemicals, healthcare, renewables, utilities, semiconductors, metal and mining segment.
Mubadala had invested in Noida and San Francisco-based healthcare data analytics startup Innovaccer’s Series C round, along with Steadview Capital, Tiger Global, Dragoneer, Westbridge, and Microsoft’s venture fund M12. Besides this, it is also one of the major investors in SoftBank’s Vision Fund I, which recently announced $17.7 Bn in losses.
It has over five global offices and over $229 Bn in assets under management. The fund is managed by the President of the UAE, Sheikh Khalifa bin Zayed Al Nahyan. It claims that its board of directors annually reviews and approves Mubadala’s strategic direction and business plans on behalf of the government of Abu Dhabi.
Like Mubadala, the Abu Dhabi Investment Authority (ADIA) is another sovereign wealth fund of the United Arab Emirates that has been investing on behalf of the government since 1976 for long-term value creation. It also manages the emirates’ excess oil reserves estimated to be around $875 Bn.
ADIA manages a global investment portfolio that is diversified across more than two dozen asset classes and sub-categories. It directly invests directly into the global financial markets, along with its partners and through a network of external managers.
Abu Dhabi Investment Authority invests in technology assets, both publicly listed and private. Till March 2020, the sovereign fund has bought shares in publicly listed companies like LIC Housing, Jindal Stainless, Inox Leisure, Escorts, Larsen Toubro, Infosys and ICICI Bank. Technology is one of the five target areas for the investment firm. ADIA, along with Mubadala, will help expand Reliance Jio into the UAE, while the Public Investment Firm (PIF) will pay its way for entry in Saudi Arabia.
Incubated in a family office, TPG Capital was founded in 1992 by James Coulter, David Bonderman and William S. Price III as Texas Pacific Group. It focusses on growth and middle-market buyout opportunities, and manages its investment funds in growth capital, venture capital, public equity and venture debt.
The private equity group has more than $70 Bn under management. The company has invested in more than 145 startups and has got close to 53 exits. It’s portfolio spreads around consumer and retail, financial services, healthcare, industrials and services, internet and digital media, natural resources and energy, real estate and technology.
Some of its portfolio companies are Uber, hospitality startup AirBnB and online survey tool SurveyMonkey. It has also made its investments in consumer-facing Indian startups such as Livspace, Nykaa, Lenskart, BookMyShow, and is said to be in talks with Mumbai-based fantasy gaming startup Dream11 through its Tech Adjacencies Fund.
Saudi Arabia’s Public Investment Fund (PIF) is one of the largest sovereign wealth funds in the world with estimated assets of $400 Bn. The fund, which is managed by Saudi Aramco’s chairperson and PIF’s governor Yasir Al-Rumayyan, invests in the long term to maximise sustainable returns and enable the economic development and diversification of the Saudi economy.
Under the ‘Saudi Vision 2030’, Saudi Arabia is looking to cut its dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation, and tourism.
The investment in Reliance’s Jio Platform, which is PIF’s largest investment in the Indian market, was an attempt for the same. Though PIF has never specified the total number of investment, acquisitions or exits it has made, its portfolio is estimated to include close to 200 companies and projects. Some of its key investments include Uber, Live Nation Entertainment, Carnival Corporation, Boeing, Facebook, Citigroup, and Disney.
Founded in 1989 by Michael Chu and Frank Vest, L Catterton’s funds have made more than 200 investments in leading consumer brands across all segments of the consumer industry. Their most recent investment was in indoor rowing machine company Hydrow’s $25 Mn round. It’s portfolio consists of Artsy, HomePoint, The Honest Company, Getaway, and FYidoctors.
In India, the investment firm has invested in Peloton, Vroom, ClassPass, Owndays, and FabIndia. It has over 17 offices globally.
With its lengthy list of investors and a massive subscriber base to tap into, Reliance Jio is all set to usher in the next phase of Reliance’s growth as the company looks to move beyond its petrochemical business and look at the technology and digital sector for growth and sustenance in the 21st century.