Google today confirmed it will invest $4.5bn in Jio Platforms, the Indian digital services company, in exchange for a 7.7 per cent stake in the company, valuing the latter at about $65bn. It was reported yesterday that Google was in in deep talks with Jio Platforms to invest more than $4bn in the latter. Jio Platforms is the digital services arm of Reliance Industries Ltd and India’s largest telecoms operator.
Today, Sameer Samat, Google’s vice president, confirmed the investment in a blog post. Less than four months ago, Facebook said it would inject $5.7 billion into Jio Platforms.
Currently, Jio Platforms operates the Jio Infocomm telecommunications network, and since 2016, Jio Platforms has accumulated more than 388 million 4G subscribers. Today, Jio Platforms is India’s largest telecommunications company, operating several apps and other services in e-commerce and broadband.
Google said today it plans to develop an “entry-level affordable smartphone” with Jio Platforms, which will be optimized for Android and the Play Store.
“We are excited to rethink from scratch about how to make millions of users in India the owners of smartphones,” Mr Samat said in a blog post. This effort will unlock new opportunities to further promote a vibrant application ecosystem and drive the growth of India’s new economy through innovation. “
Most Indians still still don’t have access to the Internet, and fewer people own smartphones, Mr. Samat added.
On Monday, Google announced that it would invest $10 billion in India over the next five to seven years, focusing on digitizing the economy and building India’s priority products and services. Mr Samat said today that the investment in Jio Platforms was part of the plan.
Jio Platforms said it welcomed Google as its strategic investor. Under the deal, Google will invest InR 337.37 billion in a 7.7 percent stake in Jio Platforms.
Reliance Industries of India is understood to be planning to sell about 20 per cent of Jio Platforms in an attempt to raise funds for its debt-laden parent company, Reliance Industries of India. Investors have snapped up about $20 billion worth of shares in Jio Platforms in recent months.
Intel said earlier this month that it would invest $250 million in Jio Platforms. Two days ago, Qualcomm announced it would invest $97 million. Other U.S. investors, such as KKR, General Atlantic, Silver Lake and Vista, have invested billions of dollars in Jio Platforms.
Last month, Mubadala, the UAE’s sovereign wealth fund, said it would invest $1.2bn in Jio Platforms, while Saudi Arabia’s public investment funds invested $1.5bn.
Less than four months ago, Facebook announced a $5.7 billion capital injection into Jio Platforms, its biggest deal since it bought WhatsApp for $19 billion.