Speaking of Reliance Jio Platforms, India’s leading telecommunications operator said Saturday that it has secured another investment.
L Catterton, a U.S. private equity firm will invest $250 million for a 0.39 percent stake in Jio Platforms, becoming the ninth investor to support the Indian company at the height of a global pandemic.
The Catterton, a company known for investing in consumer technology companies, has supported dozens of established start-ups over the years, including Peloton, style ‘police-size: 1.125rem; letter spacing: -0.1px; Vroom, ClassPass, Owndays and PVR cinemas.
The announcement, which makes L Catterton the ninth investor to support Jio in eight weeks, comes hours after the three-and-a-half-year telecommunications network said it was selling a $600 million stake to TPG. The new investment, like TPG’s, values Jio Platforms at $65 billion.
Trust Jio Platforms has now secured more than $13.7 billion by selling approximately 22.3 stakes to Facebook, Silver Lake, KKR, Vista Equity Partners, General Atlantic, Mubadala, Abu Dhabi Investment Authority, TPG and L Catterton over the past eight weeks.
“We look forward to partnering with Jio, which is particularly well positioned to realize its vision and mission to transform the country and build a digital society for 1.3 billion Indians through its unparalleled digital and technological capabilities,” Michael Chu, co-CEO of L Catterton, said in a statement.
Investor optimism on Jio Platforms, which has amassed more than 388 million subscribers, shows their growing interest in the Indian telecommunications market. Media reports have claimed in recent weeks that Amazon is considering buying stakes worth at least $2 billion in Bharti Airtel, India’s third-largest telecommunications operator, while Google has held talks for a similar deal in Vodafone Idea, the second-largest telecoms operator.
Jio Platforms also operates a host of digital applications and services, including the music streaming service JioSaavn (which it says it will take public), on-demand over-demand JioTV and payment app JioMoney, as well as smartphones, and broadband business. These services are available free of charge to Jio subscribers.
Pankaj Jain, a leading angel investor, told TechCrunch that Jio Platforms’ digital services suite appeared to have helped it attract foreign investors. “Foreign investors see that owning the pipes is a race down in terms of ARPU (average revenue per user), but having so many services bundled seems like this is the future for telecommunications companies. By solidifying their content strategy, they have appealed to investors who see the same strategy unfolding in other markets,” he said.
“Unfortunately, it remains to be seen whether content can significantly increase margins in India.”
Although Reliance Jio Platforms has not revealed why it raises so much money, this capital could be deployed to reduce the oil-to-retail giant Reliance Industries net debt of about $21 billion, said Mahesh Uppal, director of communications consulting firm Com First, in a conversation with TechCrunch.
Ambani has pledged to erase Reliance’s debt by early 2021. Reliance Industries had no debt in 2012, but that changed when the company decided to enter the telecommunications market.
“I look forward to leveraging L Catterton’s invaluable experience in creating consumer-focused businesses, as technology and consumer experience must work together to propel India to digital leadership,” Ambani said in a statement today.