Weeks after Facebook invested $5.7 billion in Jio Platforms, India’s largest telecommunications operator, private equity firm Silver Lake is following suit, and willing to pay a premium for it.
Silver Lake announced Monday that it will invest 56.56 billion Indian rupees (about $746.8 million) in Jio Platforms to acquire approximately 1.15% of the Indian telecommunications network. This corresponds to a valuation of $65 billion, a premium of 12.5% compared to the implicit valuation of Facebook’s investment.
Menlo Park-based PE, with combined assets of approximately $40 billion and committed capital, has invested in dozens of technology companies over the years, including video game engine maker Unity, Skype, the consulting Gartner, Alibaba’s Ant Financial, IT giant Dell and Chinese giant Didi Chuxing.
Silver Lake has made several investments this year. Last month, investments were made in Expedia and Airbnb. In March, the company invested $1 billion on Twitter and toured Waymo. This is the second investment Silver Lake has made in an Indian business. In 2013, the company invested in the Bangalore-based startup for Eka’s commodity trading and risk management software.
Reliance Jio Platforms, which began commercial operations in the second half of 2016, has revitalized the local telecommunications market by providing the majority of free 4G voice calls and data to users for six months. A subsidiary of Reliance Industries (the most valuable Indian company in terms of market value), Jio Platforms has gained 388 million subscribers since its launch to become the country’s leading telecommunications operator.
Jio brought exceptional technical skills to deliver the power of affordable digital services to the general public and small businesses. The market potential it targets is huge. We are honored and pleased to have been invited to work with Mukesh Ambani and the Reliance and Jio team to advance Jio’s mission, said Egon Durban, co-CEO and managing partner of Silver Lake, in a statement.
Jio Platforms, formerly known only as Jio, also offers a number of services, including the JioSaavn music streaming service (which will become a public company), smartphones, broadband activity, JioTV live television service on demand, and payments service – JioPay.
In a statement, Mukesh Ambani, who oversees Reliance Industries, said: “Silver Lake has exceptional experience as a valued partner to the world’s leading technology companies. Silver Lake is one of the most respected voices in technology and finance. We are delighted to use knowledge of their global technology relationships to transform Indian digital society. “
In the company’s earnings call last week, Ambani said several companies have expressed interest in buying Jio Platforms shares, in which he has invested more than $30 billion over the years, in the wake of a recent deal with Facebook.
Facebook said that Jio Platforms would not only be offered the capital for a 9.99% stake in the company but they would also work with the Indian giant in various areas, starting with e-commerce.
A few days later, JioMart, an e-commerce company from India’s largest company, began testing an “ordering system” on WhatsApp, the most popular smartphone application in India with over 400 million users making it the second-largest internet market in the world.
The Facebook and Silver Lake offerings should help Ambani further solidify investor engagement last year when he said he wanted Reliance’s net debt to drop from around $21 billion to zero in early 2021. Due to the pandemic net income for the quarter ended March 31 decreased by 37% because of taking a hard hit on the companies main activities including petrochemicals and oil refining.
A version of this article first appeared on TechCrunch.