Jio Platforms hauls in $8 bn in three weeks as Vista Equity gets on board with $1.5 bn cheque

Mukesh Ambani led Reliance Industries continues to build fundraising momentum for its digital arm Jio Platforms. After social media giant Facebook and US-based private equity firm Silver Lake, the company has brought Vista Equity Partners on board as an investor. The Austin, Texas-based private equity firm will invest $1.5 billion ( Rs  11,367 crore) in Jio Platforms.

With the investment, Vista will own a 2.32% equity stake in Jio Platforms on a fully diluted basis, making it the largest investor in the firm behind Reliance Industries and Facebook, according to a statement.

The investment values Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. This is the same valuation it received when Silver Lake invested $747.3 million last week. 

On April 22, Facebook invested $5.7 billion in the company at an enterprise value of $65.95 billion or Rs 4.62 lakh crore pre-money. 

With the Vista investment, Jio Platforms has raised close to $8 billion over the last three weeks, selling a total of 13.8% stake to the three investors.

“We are excited to leverage the professional expertise and multi-level support that Vista has been offering to its investments globally for the benefit of Jio,” Mukesh Ambani, chairman and managing director, Reliance Industries, said.

Vista has over $57 billion in cumulative capital commitments, focused on investments in enterprise software, data and technology-enabled companies. Currently, its portfolio companies have a significant presence in India with over 13,000 employees, the statement added.

“We are thrilled to join Jio Platforms to deliver exponential growth in connectivity across India, providing modern consumer, small business and enterprise software to fuel the future of one of the world’s fastest-growing digital economies,” Robert F. Smith, founder, chairman and CEO of Vista, said.

Jio Platforms, a wholly-owned subsidiary of RIL, operates proprietary telecom technology 4G LTE and several apps such as JioSaavan, JioTV and JioPay. 

RIL also owns and operates Reliance Jio Infocomm, its digital and telecommunications arm with a subscriber base of 388 million, through Jio Platforms.

After disrupting the telecom industry by offering competitively priced high-speed internet access in 2016, Reliance Jio forayed into the broadband and home entertainment space with JioFiber. The company has also taken on Amazon and Flipkart, by venturing into India’s booming ecommerce market with a soft launch of JioMart late last year. 

Shortly after the recent investment from Facebook, Reliance Jio launched JioMart on WhatsApp last month.

The fundraising spree is believed to be part of Reliance’s efforts to reduce its debt, which according to a Reuters report, was at more than $40 billion as of September last year. The company had undertaken an organisational rejig last year to make its digital business entity debt-free to attract strategic and financial investors. 

According to various media reports, Reliance is in talks with Saudi Arabian oil company Saudi Aramco, to sell a fifth of its oil and chemical refining business for roughly $15 billion. It is also set to sell a stake in its telecom tower assets to Canadian private equity firm Brookfield Asset Management for over $3 billion.