Why Global Investors are betting Big on JioPlatforms and What is the appeal of Jio Platforms?

In the past few weeks, we saw many global investors pouring money into Jio Platforms. In this article, I’ll tell you what is the major appeal of the Jio Platform and why it is attracting so much market attention. I will start by mentioning global investors followed by a brief & interesting story on how Reliance introduced Jio Platforms. First, let's have a brief on what this article includes which will help you understand things very well. You can visit the YouTube channel to get this in a short video format. Visit: URL: https://youtu.be/vRgKAgy3m5s Seen the Video? I m pretty sure you have got an idea. Excited to learn more? Let us continue !!

Following is the timeline of investments:

22 April: Facebook invests 43,574 crore INR for 9.99% stake (largest investment for a minority stake  by a technology company in the world and largest FDI in the technology sector in India)

03 May: Silver Lake private equity invests 5,655.75 crore INR for 1.15% stake

08 May: Vista Equity partners invest 11,367 crore INR for 2.32% stake

17 May: General Atlantic (US investment firm) invest 6,598.38 crores for 1.34% stake

22 May: KKR invest 11,367 crores for 2.32% stake

05 June: Mubadala (Abu Dhabi sovereign fund) invest 9,093.6 crore INR for 1.85% stake

05 June: Silver Lake invested 4,546.8 cr for 0.93% stake

07 June: Adia invested 5,683.5 cr for 1.16% stake

13 June: TPG (American PE) invested 4,546.8 cr for 0.93% stake

13 June: L Catterton invested 1,894.5 cr for 0.39% stake

18 June: Saudi Arabia’s PIF (one of the world’s largest sovereign wealth funds) invest 11,367 crores for 2.32% stake.

Thus Reliance’s Jio Platforms were able to raise close to 115,695 crores from 11 players for approx. 24.7% stake in just 9 weeks. To put this number in perspective, the Indian startup ecosystem raised ~110,650 cr in 2019 (according to Traxn report).

How Jio Platforms was introduced?

In 2010, Reliance Industries took a 95% stake in IBSL (Infotel Broadband Services Ltd), marking Mukesh Ambani’s first foray into the telecom business. In 2013, IBSL was rebranded as Jio Platforms aimed at housing digital services for reliance group. In 2016, nationwide Jio Infocomm was launched, which is a wholly-owned subsidiary of Jio Platforms. In just a little more than 3 years after the launch, Jio Infocomm became the number 1 telecom operator in India both by subscriber base and by revenue market share. 

Now coming on to the main point What is the appeal of the Jio Platform?

These investors see Jio Platforms as not just a telecom giant but much more. They are investing in Mukesh Ambani’s vision of making Jio platform as a homegrown next-generation digital ecosystem. This digital ecosystem will have e-commerce, digital payments, and digital content services at its core. 

Let us talk about JioMart, an online grocery platform, which provides a big step towards building that digital ecosystem. Recently launched in more than 200 towns, it gives a tough competition to Amazon, Flipkart, BigBasket, and Grofers. Jio platform is looking to use Facebook’s WhatsApp which has a userbase of over 400 million in India, to connect consumers with Kirana grocery stores. This model is very similar to creating a super-app like China’s WeChat.

With the integration of Whatsapp Pay and Jio Money and services like Jio Saavan, Jio Cinema, Jio TV, its fiber, and cloud services, the Jio Platforms is looking to unlock the digital ecosystem in India and address a large market that may potentially be approx. 150 lakh crore across e-commerce, payments, and content.  Watch out more interesting videos. Click Finance Insights