KKR to invest $1.5b in India's Jio Platforms

The private equity firm becomes the fifth external investor and will obtain a 2.32% stake in the company. Last week, General Atlantic announced it would invest $870 million in the company. In total, Jio Platforms is expected to receive INR785.6 billion ($8.8 billion) in committed capital. The investments give Jio Platforms an equity value of INR4.91 trillion, Reliance said in a statement. Facebook is expected to be the largest external shareholder with a 9.9% stake.

Founded in November last year, Jio Platforms is the parent of India's Reliance Jio Telecom, the country’s leading mobile carrier which claims to have more than 387.5 million subscribers.

Founded in November last year, Jio Platforms is affiliated with India's Reliance Jio Infocomm, the country’s leading mobile carrier which claims to have more than 387.5 million subscribers. Reliance Industries wants to leverage this user base and create 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 Telecom.

A series of Jio-branded apps have been launched. 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.

“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. 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,” said Henry Kravis, co-CEO of KKR. 

JioMart, in particular, could play a pivotal role as it is expected to integrate with Facebook’s WhatsApp, the country’s leading messaging service, so that small retailers would be able to sell inventory through a chat-based ordering system.

Reliance has piloted this initiative by redesigning a few neighborhood shops that have signed on as merchants with Jio livery. These shops are also provided with Jio-owned point-of-sale devices. Customers would buy items on the e-commerce app with wholesale goods supplied to the shop from Jio-owned superstores. Reliance Industries also counts Reliance Retail, the country’s largest network of supermarkets, as an operating subsidiary.

Analysts speculate that payments for goods ordered on JioMart could also be made via WhatsApp Pay, a long-planned initiative by Facebook seeking to enable Indian users to make payments within the messaging service. WhatsApp has yet to obtain the necessary regulatory approval to offer payment solutions despite waiting for more than two years.

According to Reliance’s latest quarterly report, nearly 70% of the group’s 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%.

KKR's investment will come from its Asia private equity and growth technology funds. The existing India portfolio primarily comprises traditional businesses, although the firm has backed internet-enabled technology players elsewhere in Asia, including China's ByteDance Technology, operator of the TikTok social media platform, and Indonesian ride-hailing and offline-to-online services provider GoJek.

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• Topics
• South Asia
• Early-stage
• Technology
• Expansion
• India
• Reliance Strategic Business Ventures Limited
• KKR