As reported last week, General Atlantic, a big ticket investor in the consumer tech space, has decided to invest Rs. 6,598.38 crore ($870 million) for buying in 1.34 % stake in Reliance Industries' digital assets subsidiary Jio Platforms Ltd.
What more, General Atlantic has confirmed that this is the first of its investments in Jio and wouldn't mind increasing its stake in the future.
General Atlantic had previously made strategic investments in high-profile companies like Facebook, Alibaba, Airbnb, Slack, Ant Financial, ByteDance, Snapchat and Box. General Atlantic was attracted by Jio’s content play platform with their broadband connectivity reach.
Apparently, General Atlantic was also impressed with the opportunities around health care that Jio brings along with it. "It is exciting given what is happening during Covid times and digital health. Then the opportunity around commerce and what it could potentially do,” a top official of GA involved in the deal said.
There were three scorching deals for Jio Platforms in the three preceding weeks with the social media giant Facebook ($5.7 billion), and investment firms Silver Lake Partners ($750 million) and Vista Equity Partners ($1.5 billion).
What crisis? Another big US private equity investor buys into Mukesh Ambani's Reliance JioGeneral Atlantic joins Silver Lake and Vista Equity with deal at a $65bn valuation.FT story w/ @b_parkyn and @AnjliRaval https://t.co/cCoGukOW8VMay 17, 2020
General Atlantic's investment comes just two days ahead of RIL’s Rs 53,000 crore rights issue, and valuing the company at Rs 4.91 trillion. RIL said the deal with General Atlantic gives Jio Platforms an enterprise value of Rs. 5.16 trillion ($65 billion) — the same valuation implied by the Silver Lake and Vista deals and a 12.5% premium over Facebook’s deal.
Jio, by off-loading about 14.7% of its stake at premium value in the last month, has underlined its growing supremacy in the world’s second largest internet market.
Mukesh Ambani, Chairman and Managing Director of RIL said, “General Atlantic shares our vision of a digital society for India and strongly believes in the transformative power of digitization in enriching the lives of 1.3 billion Indians. We are excited to leverage General Atlantic’s proven global expertise and strategic insights across 40 years of technology investing for the benefit of Jio."
Akash Ambani emerges
Bill Ford, Chief Executive Officer of General Atlantic, said “As long-term backers of global technology leaders and visionary entrepreneurs, we could not be more excited about investing in Jio. We share Mukesh’s conviction that digital connectivity has the potential to significantly accelerate the Indian economy and drive growth across the country. General Atlantic has a long track record working alongside founders to scale disruptive businesses, as Jio is doing at the forefront of the digital revolution in India.”
Interestingly, the Reliance press statement also had a quote attributed to Akash Ambani, Director of Reliance Jio, and the older son of Mukesh Ambani. His name was not in the press statements in the previous three big--ticket investments.
Akash Ambani is, however, presented by Indian financial newspapers as the person behind these major investment deals.
On General Atlantic's investments, Akash Ambani said, said "We are delighted that a renowned global investor like General Atlantic is partnering with us in our journey to digitally empower India and Indians. Jio is committed to make a digitally inclusive India that will provide immense opportunities to every Indian citizen especially to our highly talented youth. General Atlantic's endorsement and partnership energises Jio’s young team to set, and achieve, even more ambitious goals in our onward march."
Sh #AkashAmbani commenting on the #GeneralAtlantic #RIL #JioPlatforms deal said : pic.twitter.com/U0HsTS5aa4May 17, 2020
More investments into Jio in the pipeline
In the same statement, Sandeep Naik, Managing Director and Head of India & Southeast Asia at General Atlantic said, “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.”
More importantly, Sandeep Naik was later quoted as saying that this was a long-term investment and not keeping short-term milestones like Jio Platforms’ expected IPO in mind.
He added that his comany would like to increase its stake in Jio Platforms in the future.
