Is US based Firm KKR planning to invest in Ambani’s Reliance Jio Platforms?
Reliance Jio Platforms, the telecom-to-commerce internet ecosystem, finally has accepted to pick up its fifth foreign investment by selling off 2.32% stake to U.S. equity firm KKR.
KKR announced it would be making the investment from its Asia Private equity and growth technology funds. This investment comes with significant fund infusions in Jio Platforms from Facebook($5.7 billion), Silver Lake Partners($747 million), Vista Equity Partners($1.5 billion) and General Atlantic($870 million). Also Read | A Virtual Home Tour: Let’s Explore Ambani’s Billion Dollars Heritage-Antilia
KKR, one of the world’s earliest PE firms, owns a rich history of scaling technology and media businesses into global enterprises. In Asia, it has been responsible for backing up internet giants like ByteDance and Gojek among others. Globally, KKR has invested over $30 billion in companies till date.
Ambani, the chairman and managing director of oil-to-telecoms giant Reliance Industries has poured over $30 billion to build Jio Platforms, said the company was looking forward to leverage “KKR’s global platform, industry knowledge and operational expertise to further expand Jio.”
In recent years, India has turned up as one of the biggest global battlegrounds for Silicon Valley and Chinese firms that are looking to win the nation’s 1.3 billion people, most of whom continue to survive without a smartphone and internet connection.
Amazon, Google, Facebook, Microsoft, Xiaomi, and TikTok-parent firm ByteDance among several others already include India as one of their most significant overseas markets. In the past decade, nearly half a billion Indians came online for the first time, largely due to Reliance Jio, which has accumulated over 388 million subscribers.
Reliance Jio was launched in 2016 and has upended India’s telecommunications industry with economical data plans and free voice calls, forcing incumbents such as Airtel and Vodafone to significantly amend their plans to sustain customers and many to consolidate and exit the market.
Reliance Jio Platforms is also the proud owners of a group of digital apps and services including music streaming service JioSaavn (which it says it will take public), on-demand live television service and payments service, as well as smartphones, and broadband business.
“Few companies have the potential to transform a country’s digital ecosystem in the way that Jio Platforms is doing in India, and potentially worldwide. Jio Platforms is a true homegrown next generation technology leader in India that is unmatched in its ability to deliver technology solutions and services to a country that is experiencing a digital revolution,” Henry Kravis, co-founder and co-chief executive of KKR, said in a statement.
“We are investing behind Jio Platforms’ impressive momentum, world-class innovation and strong leadership team, and we view this landmark investment as a strong indicator of KKR’s commitment to supporting leading technology companies in India and Asia Pacific,” he added.
The new capital should also support Ambani, further strengthen his last year’s commitment to investors when he pledged to cut Reliance’s net debt of about $21 billion to zero by early 2021 — in part because of the investments it has made to build Jio Platforms. Its core business — oil refining and petrochemicals — has been hard hit by the coronavirus outbreak. Its net profit in the quarter that ended on March 31 fell by 37%.
Reports published in Tech Crunch also states, that, in the company’s earnings call last month, Ambani said several firms had expressed interest in buying stakes in Jio Platforms in the wake of the deal with Facebook.