In what is the biggest deal in India’s digital ecosystem so far, Facebook has invested $5.7 billion in Reliance Jio to acquire a 9.9 percent stake.
This pegs Jio’s pre-money valuation at about $66 billion, and also makes Facebook the largest minority shareholder in the company. It also values Jio Platforms amongst the top five listed companies in India by market capitalisation.
“The partnership between Facebook and Jio is unprecedented in many ways. This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India,” Reliance Industries stated.
The Facebook investment comes six months after Jio’s parent company Reliance Industries rejigged its group structure to make the telecom entity net debt-free, also paving the way for a stake sale.
This deal will “accelerate India’s digital transformation” and fuel the creation of innovative new enterprises and connecting people in new ways, Facebook stated.
David Fischer, Chief Revenue Officer, and Ajit Mohan, VP and Managing Director, India of Facebook, wrote in a joint note:
“Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India. They account for the majority of jobs in the country, and form the heart and soul of rural and urban communities alike.”
JioMart, Jio’s small business initiative, will be a key focus in the partnership.
Concurrent with the Facebook investment, Jio Platforms, Reliance Retail and WhatsApp have also entered into a commercial partnership agreement to accelerate Reliance Retail’s ‘New Commerce’ business on the JioMart platform targeted at SMBs.
“Our goal is to enable new opportunities for businesses of all sizes, but especially for small businesses across India and create new and exciting digital ecosystems that will empower, enrich and uplift the lives of all 1.3 billion Indians,’ Reliance said.
“WhatsApp is so ingrained in Indian life that it has become a commonly used verb across many Indian languages and dialects. With the power of WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience,” Facebook added.
WhatsApp counts 400 million users in India, its largest market. Reliance Jio, on the other hand, has racked up 388 million subscribers in less than four years of operations.
Interestingly, this is not the first time that both the companies have engaged.
In July 2019, Facebook had partnered with Reliance Jio for a digital literacy drive called ‘Digital Udaan’. It was targeted at tens of millions of JioPhone users in India, who were new to the internet. The joint initiative reached 200 locations across 13 Indian states and introduced vernacular users to the joys of mobile connectivity.
(Edited by Teja Lele Desai)
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