Will Facebook’s investment in Mukesh Ambani’s tech firm Jio Platform make India’s richest man even richer?
The US company has committed to buying about 10 per cent of Ambani’s Jio Platforms – its biggest purchase since WhatsApp – as the social media eyes a piece of India’s blossoming ecommerce market
Facebook will invest US$5.7 billion in the digital assets controlled by India’s richest man, Mukesh Ambani, as the US social networking giant seeks a broader foothold in its biggest global market.
The US company will buy about 10 per cent of Ambani’s Jio Platforms, becoming the largest minority shareholder, Reliance Industries said in a statement on April 22. Separately, Facebook said the deal would bring together JioMart, an e-commerce venture of Ambani, and its WhatsApp platform to enable people to connect with businesses.
The deal values Jio Platforms at a pre-money enterprise value of about US$66 billion, the Indian company said.
The partnership with Jio would allow Facebook chief executive officer Mark Zuckerberg to step up his expansion in a country that is rapidly embracing online payment and e-commerce as more people get smartphones.
Reliance Jio Infocomm burst onto the Indian wireless telecommunications market about four years ago, quickly moving into a position of dominance by offering free plans and undercutting rivals. Working with Facebook would be a boost to the ambitions of Ambani, the richest man in Asia, who has been remaking his energy conglomerate as India’s first titan of e-commerce.
The purchase is Facebook’s biggest since its 2014 acquisition of WhatsApp – and an unusual bet for a company that typically buys into media and online properties. It underscores the potential it sees in India, which, unlike China, is an open market with an exploding smartphone population. Facebook may benefit from a well-connected ally in the country, where Facebook’s WhatsApp is trying to launch a payment service but has run afoul of regulatory scrutiny over fake news and privacy concerns.
“This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country,” Facebook said in its statement.
Zuckerberg has long aimed to roll out a digital currency as well as tools that let users make payments and buy and sell products over the social network’s messaging services in India.
With its half-billion internet users, the South Asian country is an alluring market for the world’s largest technology companies, including Amazon, Apple, Microsoft and Alphabet’s Google. In India, Facebook has about 250 million users, while WhatsApp has more than 400 million.