Reliance Jio Platforms bags $1.5 billion from KKR after Facebook deal
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American investors are hoarding billions in Indian telecom operator Jio Platforms as they seek to take advantage of the country’s booming digital economy.
Jio Platforms, owned by billionaire Mukesh Ambani, Reliance Industries, said in a statement on Friday that private equity firm KKR, based in New York, is pledging $ 1.5 billion for 2.32% stake in the company at a valuation of $ 65 billion.
The announcement comes a month after Facebook announced it was investing $ 5.7 billion in Jio Platforms in exchange for a 9.9% stake. It was Facebook’s biggest transaction since buying WhatsApp for $ 19 billion.
Elsewhere, Silicon Valley venture capital firm Silver Lake said it was investing $ 750 million 18 days ago, and Austin-based private equity firm Vista said it was taking a $ 1.5 billion stake 14 days ago.
Jio Platforms is clearly the flavor of the month among the major American technology investors. But why? With 1.35 billion inhabitants, India is rapidly catching up with the most technologically advanced nations and investors do not want to miss the opportunity that India presents.
Jio Platforms operates the Jio Infocomm telecommunications network, which has accumulated more than 388 million 4G subscribers since its launch in 2016. Today it is the leading telecommunications operator in India and also has several applications and other services in e-commerce and broadband.
“Jio offers mobile internet almost for free and is trying to make money by selling subscriptions to their own versions of Spotify and Netflix,” said Vishal Gulati, a venture capitalist with London firm Draper Esprit.
Ambani, India’s richest man, is trying to sell around 20% of the Jio platforms to raise funds for the heavily indebted parent company, which is heavily involved in oil and petrochemicals. He would have a net debt of around $ 20 billion.
About $ 9 billion in equity in Jio Platforms has been sold to U.S. investors in the past few weeks.
The Saudi Arabian sovereign wealth fund and Mubadala, the Abu Dhabi sovereign wealth fund, also plan to acquire significant holdings of around $ 1.5 billion and $ 1.2 billion respectively, according to the Financial Times.
“Few companies have the potential to transform the digital ecosystem of a country like Jio Platforms does in India, and potentially around the world,” said Henry Kravis, co-founder and co-CEO of KKR, in a statement .
“Jio Platforms is a true next-generation local technology leader in India that is unmatched in its ability to provide technology solutions and services to a country experiencing a digital revolution.”