TPG, A U.S. private equity firm Said Saturday it will invest $600 million in Jio Platforms, joining a list of top investors, including Facebook and Silver Lake who have supported India’s top telecommunications operator at the height of a global pandemic.
TPG said it is acquiring a 0.93% stake in Jio Platforms, giving the Indian company a valuation of $65 billion. TPG, which manages $79 billion in assets, is the eighth investor to support Mukesh Ambani’s telecommunications network in as many weeks.
Reliance Jio Platforms, which amassed more than 388 million subscribers, earned $13.49 billion by selling nearly 22% of the company’s capital to Facebook, Silver Lake, KKR, Vista Equity Partners, General Atlantic, Mubadala, Abu Dhabi Investment Authority, and TPG.
TPG, which is also an investor in Uber, Spotify and Airbnb, said it was impressed by what the three-and-a-half-year subsidiary of India’s most beloved company (Reliance Industries) has achieved in the country. Mukesh Ambani, India’s richest man, shared a similar supplement for TPG’s history.
Jim Coulter, co-CEO of TPG said, the company was “excited to play an early role in Jio’s journey as they continue to transform and advance India’s digital economy. Jio is a disruptive industry leader that empowers small businesses and consumers across India by providing them with essential, high-quality digital services. The company brings unparalleled potential and execution capabilities to the market, setting the tone for all future technology companies.
Saturday’s announcement further reflects Jio Platforms’ growing appeal to foreign investors looking for a share of the world’s second largest internet market. Jio, which launched its commercial operations in the second half of 2016, has shaken up the telecommunications market in India by offering mobile data and voice calls at reduced prices.
Pankaj Jain, a leading angel investor, told TechCrunch that Jio Platforms’ digital services suite has helped it attract foreign investors. Jio Platforms owns a host of digital applications and services, including the music streaming service JioSaavn (which it says it will take public), on-demand JioTV live TV service and payment app JioMoney, as well as smartphones, and broadband business. These services are available free of charge to Jio subscribers.
“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.”
Over the past year, Jio has also made a foray into the video game category, unveiled a video call assistant to automate customer support, signed an agreement with Microsoft to subsidize Office 365 and Azure for small businesses in India, and unveiled plans to bring new movies home to people on the same day of their theatrical release.
While Reliance Jio Platforms did not share why it is raising funds, the capital could be deployed to reduce the oil giant’s net debt to retail reliance Industries by about $21 billion, said Mahesh Uppal, director of communications consulting firm Com First. 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 am pleased to welcome TPG as a valuable investor in our ongoing efforts to digitally empower Indian lives through the creation of a digital ecosystem,” Ambani said in a statement.
update: Jio Platforms secured another investment: this time L Catterton, which is contributing $250 million for a $0.39 stake in the company.