Why Facebook, KKR And Everyone Else Wants To Invest In Indian Mobile Firm Jio Platforms

Even amid the economic headwinds that are blowing on a global scale, some investors are finding opportunity in what are seen as longstanding or even permanent trends like the shift to digital commerce through mobile means. For example, Jio Platforms — India’s largest mobile commerce company and a subsidiary of Reliance Industries — has attracted a slew of new investors over the past several weeks.

In the latest news, New York-based KKR was reportedly in “advanced talks” to take a $1.5 billion stake that would value Jio at $65 billion. That news came after General Atlantic paid $870 million earlier this month for a 1.3 percent stake in Jio Platforms. And that transaction comes after Facebook ponied up $5.7 billion for 10 percent in Jio, while Silver Lake invested $750 million and Vista Equity paid $1.5 billion.

All in all, Reliance has raised roughly $10.4 billion from investors in just over a month in exchange for 17 percent of Jio.

Jio has 388 million subscribers in India and has been making the leap from traditional channels in mobile such as basic voice calling toward a digital ecosystem. Its market share in wireless is significant — 35 percent of the Indian market — and indicates the strength of an installed base for cross-selling other (digital) services. Jio also owns a music-streaming service called JioSaavn, as well as a streaming TV business called JioTV.

Jio said earlier this year that it would endeavor to become the first telco to offer a Unified Payments Interface (UPI) service integrated into its app. This payments functionality would boost financial inclusion among unbanked and underbanked populations who have access to technology.

India, of course, has been making the leap to a life lived digitally — where among the most-sweeping efforts, a demonetization policy took root in 2016. As a result, the country saw an uptake in digital wallets. Last month, Reliance also announced plans to debut JioMart, a pilot program for a grocery delivery service that will feature an online-to-offline ordering system on WhatsApp.

Politically speaking, buying from local merchants would dovetail nicely with a nationwide initiative announced this month by Indian Prime Minister Narendra Modi. The prime minister called on Indian consumers to be “vocal about local” goods and brands, focusing on buying items made within the country. By contrast, The Economic Times estimates that global brands sold by multinationals currently dominate the Indian market.