General Atlantic joins PE backers of Reliance's India app platform

In the past few weeks, the company has secured investments from Facebook, Silver Lake Partners, and Vista Equity Partners. Should the four deals receive regulatory approval then Jio Platforms is expected to receive INR671.9 billion in total committed capital. The investment gives Jio Platforms an equity value of INR4.91 trillion and an enterprise value of INR5.16 trillion, Reliance said in a statement. 

Founded in November last year, Jio Platforms controls Reliance Jio Telecom, the country’s leading mobile carrier which claims to have more than 387.5 million subscribers. Reliance Industries wants to build an app ecosystem as a gateway to the internet for first-time users of mobile internet services, many of whom have come online chiefly as a result of cheap data plans offered by Jio Tekecin. In recent months, Jio Telecom has started to roll back a four-year price war intended to build market share.

The conglomerate has sought to leverage this user base by launching a series of Jio-branded apps (Jio is Hindi for the verb "live"). Reliance Strategic Business Ventures, a corporate venture arm, helped lay the foundation for this effort through the acquisition of several local VC-backed start-ups such as Embibe and NowFloats.

There are at least 13 official consumer-facing apps. They include music streaming app JioSaavn, the result of a merger between Tiger Global-backed Saavn and Jio Music in 2018, e-commerce platform JioMart, payment wallet JioMoney, and video streaming apps JioTV and JioCinema.

“General Atlantic has nearly two decades of experience of investing in India, and specifically in founder-led businesses that are based upon principles of enablement, inclusion and progress. In just three and a half years, Jio has had a transformational impact in democratizing data and digital services, propelling India to be positioned as a leading global digital economy,” said Sandeep Naik, a managing director and head of India and Southeast Asia at General Atlantic.  

At the start of the year, Jio Platforms also launched its own e-commerce app that it says would enable millions of small shops to list their inventory online with some of the goods likely to be supplied by Reliance entities. According to a recent presentation, Reliance estimated the size of this unorganized retail market, which largely transacts offline, to be $735 billion in 2019. Helping the network operate online is expected to lead to significant synergies with Reliance’s retail network; the conglomerate says it runs more than 11,700 stores across the country.  

In a recent earnings call, Facebook CEO Mark Zuckerberg hinted at the possibility of integrating JioMart with WhatsApp that he said would allow small retailers like neighborhood shops to sell goods through a chat-based ordering system. The messaging service has yet to obtain the necessary regulatory approval to offer payment solutions, though, despite waiting for more than two years. 

According to Reliance’s latest quarterly report, nearly 70% of revenue came from oil-related activities in the previous financial year. Digital services - the unit comprising the firm's telecom and internet business activity - contributed 8.8%, up from 6%. Profit for the period rose by 0.1% to INR398.8 billion and the group reported INR3.36 trillion in outstanding debt. The group’s oil-related businesses have been severely impacted by falling oil prices and a steep fall in global demand due to the COVID-19 pandemic. 

Reliance has declared an ambition to eliminate net debt by the end of the current financial year and will soon attempt to raise INR531.2 billion in capital through a new equity issue. It has also agreed to divest sell assets related to retail fuels, chemicals and telecom infrastructure.

In India, General Atlantic has also invested in live education platform Unacademy, real estate marketplace NoBroker, educational video provider Byju’s, and electronic payments platform BillDesk.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Expansion
• Technology
• India
• General Atlantic
• Reliance Strategic Business Ventures Limited
• TMT