Eyeing huge market, Silver Lake invests $750 mil. in India’s Jio Platforms

07, May. 2020

Photo by Andrea Leopardi on Unsplash
Photo by Andrea Leopardi on Unsplash

NEW DELHI, NNA - Global tech investor Silver Lake has acquired a 1.14 percent stake in the Indian digital firm Jio Platforms Ltd. for over 56.5 billion rupees ($750 million) as it looks to partner the local firm in its aggressive digital push in the South Asian country.

The investment by the giant American private equity firm comes close on the heels of a mega $5.7 billion investment by social media giant Facebook Inc. in the digital firm, a wholly-owned subsidiary of Reliance Industries Ltd. (RIL), last month.

On the huge growth potential of Jio Platforms and its vision to enable a Digital India for 1.3 billion people and businesses, Egon Durban, co-CEO and managing partner of Silver Lake, is impressed with how the firm is using extraordinary engineering capabilities to offer low-cost digital services to mass consumers and small businesses across the country.

In a joint media statement with Jio Platforms, Durban said, "The market potential they are addressing is enormous, and we are honored and pleased to have been invited to partner with Mukesh Ambani and the team at Reliance and Jio to help further the Jio mission.”

Jio Platforms has been offering a slew of telecom and digital services under its umbrella to hundreds of millions of subscribers and expanding services such as shopping and doing businesses online. It is now looking at ways to bring the country’s vast numbers of small merchants, micro-businesses and farmers onto its digital platform.

A highlight of its deal with Facebook is a partnership with WhatsApp to grow digital businesses on the messaging service which is already popularly used by hundreds of millions in India.

According to Motilal Oswal Financial Services Ltd., a brokerage firm, Jio Platforms' ability to garner a second deal in less than a month has reaffirmed its strong valuation and global recognition by investors.

“The stake sale further reaffirms global confidence of marquee tech investors in Jio Platforms. This would enable Jio Platforms to crystalize its digital plans by leveraging the global experience of its investors,” said the brokerage firm in its May 4 statement.

In welcoming Silver Lake as a partner, Mukesh Ambani, chairman and managing director of RIL, said in the joint statement, “Silver Lake has an outstanding record of being a valuable partner for leading technology companies globally."

“We are excited to leverage insights from their global technology relationships for the Indian digital society’s transformation,” he said in a company statement.

In the wake of the severe economic disruptions caused by the Covid-19 pandemic, globally and especially within India, the partnership with Silver Lake, has a timely significance.

Said the joint statement, "Comprehensive digitisation will be a vital component of the revitalisation of the Indian economy. It is our strong conviction that no one should be deprived of the tremendous new opportunities, including those for new employment and new businesses, embedded in India’s 360-degree digital transformation."

Silver Lake boasts other tech investments in global tech companies such as Airbnb Inc., Alibaba Group Holding Ltd., Ant Financial Services Group, Dell Technologies Inc. and Twitter Inc.

Arun Natarajan, managing director of Venture Intelligence, a local firm that tracks private equity investments, told NNA that many private equity firms have been showing keen interest in local digital service providers seeking to capitalize on the growing digital market in the country.

“RIL is leveraging its telecom firm Reliance Jio’s growing subscription base and digital infrastructure to gain traction in the market which is drawing investors’ interest,” Natarajan told NNA on Thursday.

Reliance Jio Infocomm Ltd., which provides connectivity platform to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.