We all know Jio as one of the leading telecommunication and mobile network providers in the country. Launched in the year 2015, in a very short period, it has quickly become a leader in the mobile network and service provider sector. With its innovative and proactive approach, it has carved out a special place for itself in the market. But Jio or Reliance Industries are just not limited to the telecommunications sector.
Reliance Industries Limited is several other subsidiaries and companies that cater to different markets like petroleum, fashion, retail marketing. But today we are going to focus on an upcoming and promising part of the empire, Jio Platforms.
What is Jio Platforms?
Jio Platforms is a technology and digital service company based in India, that focuses on the digital businesses of Reliance Industries. The goal of Jio Platforms is to digitalize consumer services such as online shopping, bill payments, and gaming among others.
It was founded in 2019 when Reliance Industries Limited announced that they were going to start a separate subsidy for all their digital businesses. Many believe the creation of this company was to keep all the digital businesses of the group debt-free.
So the big question you may be asking is why are we discussing it now. We all know that the whole world is going through some tough times due to the COVID-19 and the pandemic surrounding it. With the lockdown and all businesses being temporarily shut down the whole nation came to a financial standstill.
Investments in Jio Platforms
At this time of uncertainty and fear, the Jio Platform came forward with a large funding deal that came across as a breeze of fresh air for a lot of people. Jio platform has combined a group of investors from all different industries to give rise to one of the largest funding in the history of the technology sector.
So far, Jio Platform announced the nine deals it has made with the different companies totaling at rupees 97,885.65 crores or around 13 billion dollars. This has resulted in Jio Platforms value to increase to a whopping 5.166 lakh crores.
If you are interested in looking at the breakdown of all the deals and the amounts of investments by each company, here’s the complete list for you.
- Facebook became the first company to invest 43,574 crores for 9.99 percent shares of the Jio Platform.
- On May 4th, Silver Lake acquired equity shares worth 5655.75 crores. It also made an additional investment of 4546.80 crores on 5th June.
- To acquire a 2.32 percent stake, Vista invested 11,367 crores in the Reliance Industries subsidy.
- General Atlantic gained a 1.34 percent equity stake by investing 6,598.38 crores on 17th May.
- On 22nd May KKR invested another 11,367 crores to get a 2.32 percent equity stock.
- Mubadala, an Abu Dhabi based investment company, acquired a 1.85 percent equity stake for 9093.6 crores.
- Abu Dhabi Investment authority also invested 5,683.50 crores on 7th June.
- For a 0.93 percent equity stake, TPG invested 4546.8 crores on the 13th of June.
- L Catterton became the latest member on the list by investing another 1,894.50 crores to join the Jio Platforms.
What do all these investments mean for startups?
Post COVID-19 one of the biggest challenges India and all the countries may have to face is related to their startups. It is predicted that the valuation will see a severe downfall in the coming days and months. But now Jio Platforms has created a huge opportunity for all the startups in the country that can be considered revolutionary.
If we look at the example of Alibaba express in China, the country saw a booming increase in startup and innovation technology. If the same happens in India, we are set for a historic turning point in the history of startups in India. Jio Platform will now have the resources to provide the energy and funding to a lot of startup ventures.
What does it mean for Jio Platforms?
After the announcement of the high profile investments by different global companies, Mukesh Ambani, chairman of RIL, said “Recognising the pivotal role of Reliance Jio in India’s digital transformation, global technology giants Microsoft and Facebook have partnered with us. With Facebook, the strategic focus of the partnership is India’s Micro, Small and Medium Enterprises (MSMEs), farmers, small merchants, and Small and Medium Enterprises (SMEs) in the informal sector.”
This could mean that this collaboration will allow people and enterprises that are seeking a state of the art digital services. The company has also shown its interest in building a larger ecosystem that the company wants to build. It is also noted that Jio Platforms has shown interest in other capabilities that are in progress such as IaaS (Infrastructure as a Service), Paas (Platform as a Service), Robotics, Artificial Intelligence, Machine Learning among many other things.
This means that in future Jio Platforms has more funds to cater to such technological developments via startups. So far it has already filed for multiple patents from its startups and a significant number of them have been approved too. In the past year startups under Jio Platforms have bought back an return of over 100 million dollars.
What can take away from these?
With more capital available for Jio Platforms and a vast interest in different fields, it’s great news for a lot of budding startups in India. They have a higher chance of securing funds and other resources for their research and operations. It’s going to be a win-win situation for both RIL and the startup.
Another advantage is that with Jio Platforms securing such high investments from a lot of global companies, it opened the gates for other Indian companies seeking additional capital. From here on a lot of foreign internet companies can look forward to Indian telecom and Technological companies to invest their money.
Amidst the ongoing health crisis and the current tension our country is facing with the neighbour country China, this step has come forward has an encouragement boost to many. We can be assured that this development will pay off tremendously for both Reliance Industries and India. How fast this boosts the startups and the economy is to be seen, but one thing we can say with confidence is that the Indian startups are in for an upward ride.