Vista Equity to invest $1.5b in Reliance's India app platform

Reliance Industries, the oil-to-retail conglomerate that is the parent firm of both companies, announced the transaction in a statement. Following the completion of the deal, which requires regulatory approval, Vista will hold a 2.34% stake in Jio Platforms. Reliance Industries claims the transaction values the unit at $65 billion.

It extends a string of funding commitments to the company, which was officially established as a holding entity last year, involving US firms. Last week, Silver Lake Partners agreed to invest $750 million less than two weeks after Facebook agreed to commit $5.7 billion. The size of Silver Lake Partners’ stake was not disclosed while Facebook is expected to own 9.9% of the company. It brings total capital committed by external entities to approximately $8 billion.  

Reliance Jio is India's largest telecom operator by total number of subscribers. The word "Jio" means "live" in Hindi. To build on this userbase, the company has created an ecosystem by launching a series of Jio-branded apps, some of which are owned by Jio Platforms, targeting an existing 388 million-strong subscriber base. These include music streaming app JioSaavn, e-commerce platform JioMart, payment wallet JioMoney, and video streaming apps JioTV and JioCinema. Only JioSaavn is considered a category leader. 

Reliance Strategic Business Ventures, a corporate venture arm, has sought to support the growth of Jio Platforms through the acquisition of local VC-backed start-ups over the last two years. This effort has also supported related subsidiaries such as Reliance Retail, which runs India's largest chain of supermarkets.

India-based VCs have expressed measured skepticism of Reliance’s plans to create a dominant app ecosystem, citing challenges that come with developing ventures incubated within a large corporate, the price-sensitive nature of the Jio userbase, and a relatively open technology ecosystem in India.

Vista, which counts more than 60 enterprise software, data and technology companies in its portfolio, has said it would look to encourage investee companies to partner and support Jio Platforms.  

“We are thrilled to join Jio Platforms to deliver exponential growth in connectivity across India, providing modern consumer, small business and enterprise software to fuel the future of one of the world’s fastest-growing digital economies,” said Robert Smith (pictured), founder of Vista, according to the statement. 

Reliance Industries owed $21.4 billion in net debt as of March. Last month, it announced plans for a $7 billion share sale. The conglomerate has previously declared an ambition to eliminate net debt by the end of the current financial year. Profit for the quarter ended March fell by nearly two-fifths due to a fall in oil prices and weak demand caused by the COVID-19 pandemic. 

Vista has committed more than $57 billion across private equity, permanent capital, credit, and public investments since inception in 2000. It invests primarily in North America and Europe-headquartered companies. 

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• Topics
• South Asia
• Expansion
• Technology
• Media
• India
• Reliance Strategic Business Ventures Limited
• Vista Equity Partners
• TMT