The New York-based private equity firm General Atlantic closed an $870 million deal for a 1.3 percent stake in Jio Platforms, the digital subsidiary of Reliance Industries in India. The deal puts Jio’s valuation at $65 billion, according to a report in The Financial Times (FT) on Sunday (May 17).
Jio Platforms, a subsidiary of Mukesh Ambani’s Reliance Industries, benefited from recent investments by top U.S. firms like Facebook, Vista Equity Partners and Silver Lake. The General Atlantic deal is the largest in Asia to date and amounts to more than $8 billion in investments for Jio in less than a month.
“We have stayed away from a lot of the consumer tech deals that were done over the last four or five years in India, primarily because the customer acquisition costs for those companies have been very high,” Sandeep Naik, head of India and south-east Asia for General Atlantic, told FT.
“Many of [those] companies in India could only scale to the 30m-40m customers who could afford the services they were offering. But with 388m subscribers already, Jio is perfectly positioned to achieve that scale and go after the belly of the market,” Sandeep Naik added.
Between the pandemic and lowered demand for oil, there has been pressure on Ambani to cut Jio’s debt. Reliance is aiming to slash its net debt of $20 billion to zero in a year.
“General Atlantic’s endorsement and partnership energizes Jio’s young team to set, and achieve, even more ambitious goals in our onward march,” Mukesh’s son Akash Ambani, a director at Jio, told FT.
At the start of this year, Jio, the largest telecom operator in India, joined the Unified Payments Interface (UPI) space to compete alongside big-name rivals like Google Pay, PhonePe, Paytm and more. Jio already has a wallet service called JioMoney. Yet, as a telecom operator, it will be the first to offer a UPI service and the second among payment banks to offer the service.
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