On Monday (July 13), Google CEO Sundar Pichai promised to invest $10 billion in India over the next 5-7 years via the new Google for India Digitization Fund.
Today (July 15), the technology giant has revealed the recipient of almost half of that fund: ₹33,737 crore (approximately $4.5 billion), is being invested by Google into Reliance Industries-owned Jio Platforms for a 7.73% equity stake in the company.
The Jio Platforms subsidiary, formed in November when Reliance bundled its digital businesses together, is the parent of India’s largest telco, Reliance Jio Infocomm Ltd, which has over 388m subscribers.
It is also the parent of JioSaavn, the Spotify rival created during a $1bn merger in 2018 between Reliance Industries / JioMusic and decade-old music streaming service Saavn, amongst other media businesses.
In addition to the investment, Google and Jio Platforms have entered into a commercial agreement to jointly develop an entry level Android smartphone, a move which, according to Sanjay Gupta, Google Country Head & VP, India and Sameer Samat VP, Product Management, “comes at an exciting but critical stage in India’s digitization”.
“Together we are excited to rethink, from the ground up, how millions of users in India can become owners of smartphones,” they wrote in a blog post published today (July 15).
This investment by Google, says Reliance, values Jio Platforms at ₹4.36 lakh crore (approximately $58bn).
The investment also takes Jio Platforms’ total funds raised in the past four months to more than $20.6bn from 13 investors, who have collectively acquired approximately 33% of the company.
In April, Facebook acquired a 9.99% stake in Jio Platforms in a deal worth ₹43,574 crore (around $5.7bn) and in May, Reliance announced that US-based private equity tech investor Silver Lake – which has previously invested in Twitter and Airbnb – invested ₹5,655.75 crore (approximately $750m) into Jio Platforms. As a result, Silver Lake has attained a stake worth between 1% and 2% in Jio Platforms Ltd.
In June, it was revealed that Abu Dhabi’s Mubadala Investment acquired a 1.85% stake in Jio Platforms for ₹ 9,093.60 crore ($1.2bn).
Among the other companies that have recently invested in Jio Platforms are Qualcomm Ventures, which secured a 0.15% stake for ₹ 730 crore (around $97 million) and Intel, which invested ₹ 1,894.50 crore (approximately $253.5 million) for a 0.39% equity stake.
Jio Platforms’ parent Reliance Industries has said that it has become net debt free following the spate of investments and according to various news outlets, analysts expect to see a US IPO from JIO as soon as 2021.
A report from analysts Greyhound Research in particular states that it expects to see Jio listed on either the Nasdaq or New York Stock Exchange at a valuation “in the range of between $150-200bn”.
JioSaavn – majority-owned by Reliance Industries / Jio – boasts over 100 Monthly Active Users (MAUs) and its debt free parent company is striking key partnerships with some of the world’s biggest tech companies.
“Together, we hope to play a strong facilitative role in the transformative journey of building a new, Digital India.”
Mukesh Ambani, Reliance Industries
Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said: “Google has empowered millions of Indians to access helpful information and, like Jio, is a force for change and innovation.
“We welcome Google onboard and are excited about our partnership for what it can deliver to Indians, from universalising Internet usage to deepening the new digital economy and providing a prime mover to India’s economic growth.
“Together, we hope to play a strong facilitative role in the transformative journey of building a new, Digital India.”
“I am excited that our joint collaboration will focus on increasing access for hundreds of millions of Indians who don’t currently own a smartphone while improving the mobile experience for all.”
Sundar Pichai, Google / Alphabet
Sundar Pichai, CEO of Google and Alphabet, added: “Reliance Industries, and Jio Platforms in particular, deserve a good deal of credit for India’s digital transformation.
“The pace and scale of digital transformation in India is hugely inspiring for us and reinforces our view that building products for India first helps us build better products for users everywhere.
“Google is proud to invest ₹ 33,737 crore into Jio. I am excited that our joint collaboration will focus on increasing access for hundreds of millions of Indians who don’t currently own a smartphone while improving the mobile experience for all.”Music Business Worldwide
