Weeks after Facebook has invested $ 5.7 billion in Jio Platforms, India’s largest telecommunications operator, and private equity firm Silver Lake is following suit.
Silver Lake announced Monday that it will invest 56.56 billion Indian rupees (about $ 746.8 million) in Jio Platforms for about 1.15% of the capital of the Indian telecommunications network, which would give it a valuation of 65 billion dollars, a premium of 12.5% * over the value implied by the Facebook investment.
PE, headquartered in Menlo Park, which has approximately $ 40 billion in combined assets and committed capital, has invested in dozens of tech companies over the years, including the maker of video game engines. Unity, Skype, the consulting firm Gartner, Alibaba’s Ant Financial and Chinese ride – the giant Didi Chuxing, including several in recent weeks.
This year, Silver Lake invested in Expedia, Twitter (in which it invested $ 1 billion), Airbnb, Waymo and ServiceMax. This is the second investment Silver Lake has made in an Indian business. In 2013, he invested in Bangalore-based trading and risk management software company Eka.
Addiction Jio Platforms, which began commercial operations in the second half of 2016, has shaken up the local telecommunications market by providing users with a large portion of 4G data and voice calls for free for six months. A subsidiary of Reliance Industries (the most valuable Indian company in terms of market value), Jio Platforms has gathered 388 million subscribers since its launch to become the country’s leading telecommunications operator.
“Jio Platforms is one of the most remarkable companies in the world, led by an incredibly strong and enterprising management team that drives and embodies a courageous vision. They have brought extraordinary engineering capabilities to bring the power of low-cost digital services to a population of large consumers and small businesses. The market potential they are targeting is enormous and we are honored and happy to have been invited to partner with Mukesh Ambani and the Reliance and Jio team to help move the Jio mission forward, “said Egon Durban, co-general manager and managing partner of Silver Lake, in a statement.
Jio Platforms, previously known as Jio, also manages a suite of services, including the music streaming service JioSaavn (which plans to become a public company), smartphones, broadband services, television service in direct on demand JioTV and the payment service JioPay.
In a statement, Mukesh Ambani, who oversees Reliance Industries, said: “Silver Lake has an exceptional track record as a valued partner for the world’s leading technology companies. Silver Lake is one of the most respected voices in technology and finance. We are delighted to learn from the lessons of their global technological relationships for the transformation of India’s digital society. “
When calling the company’s results last week, Ambani said several companies have expressed interest in buying a stake in Jio Platforms, in which it has invested more than $ 30 billion, to the following the agreement with Facebook.
Facebook said that in addition to offering capital to Jio Platforms for a 9.99% stake in the business, it would work with the Indian giant in a number of areas, starting with e-commerce.
A few days later, JioMart, an e-commerce company run by the most popular Indian company, started testing an “ordering system” on WhatsApp, the most popular smartphone application in India with more than 400 million d active users in the world’s second largest Internet market
Facebook and Silver Lake deals should help Ambani reiterate last year’s commitment to investors when it said it plans to reduce Reliance’s net debt by about $ 21 billion to zero by early 2021.
* It is not known which share class Jio Platforms agreed to issue Silver Lake; if this is the same as what Facebook received, the urgency of the premium investment suggests that Jio may be heading for an IPO, or several other major investments in the coming weeks – or both.