Facebook Jio deal: Company invests $5.7 billion for 9.99% stake in India’s Jio Platforms

0
17


The deal, announced Wednesday, will see Facebook (FB) invest $5.7 billion for a 9.99% stake in Jio Platforms, giving the Silicon Valley company a key foothold in one of the world’s fastest growing internet markets.
Jio Platforms has several services under its umbrella, including Reliance Jio, the mobile network that has signed up nearly 390 million subscribers since launching three and a half years ago. Reliance also has a retail arm, and the tie-up includes a commercial partnership with Facebook-owned messaging platform WhatsApp that potentially paves the way for Facebook to monetize WhatsApp’s 340 million users in India.

Reliance is “humbled by the opportunity to welcome Facebook as our long-term partner in continuing to grow and transform the digital ecosystem of India,” Ambani said in a statement.

Facebook’s chief revenue officer David Fischer and vice president and managing director for India Ajit Mohan wrote in a blog post that the investment “underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country.”

And by bringing together JioMart, the company’s small business initiative, and WhatsApp, “we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience,” Fischer and Mohan wrote.

India is a key market for internet companies.

The country is in the midst of an internet boom, it is the world’s second-largest smartphone market and it boasts millions of users eager to buy stuff online, stream music and watch online videos.

And there is plenty of room to grow — close to 600 million people in the country have yet to gain internet access.

That is why the likes of Alibaba (BABA), Amazon (AMZN), Google (GOOGL), Tencent (TCEHY), SoftBank (SFTBY SOFTBANK) and countless other technology giants have pumped billions of dollars into India’s internet scene.
Disney+ launch in India delayed by the coronavirus

The investment in Jio is one of the biggest investments Facebook can make, according to Bernstein.

“The transaction fits with their recent push to build themselves and experiment more and provides a closed network of 388 million users … to build and test a WeChat like app,” Bernstein analysts said in a note Wednesday, referring to China’s popular messaging app that is used for everything from booking doctor’s appointments to making digital payments.

The Facebook investment values Jio Platforms at nearly $66 billion, according to Reliance. The deal is subject to regulatory approvals.

— Rishi Iyengar contributed to this report.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here