Google Investment in Jio Platforms: The Big Announcement Of Tomorrow?

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Update: 15 July 2020: Reliance has officially confirmed $4.5 billion investment from Google in Jio Platforms. Google is acquiring 7.7% stake in Jio Platforms to become the second-largest shareholder after Facebook.

After Facebook, Intel, Qualcomm, and a few others, Google is all set to invest in Jio Platforms.

By now, everyone is aware of how the energy conglomerate Reliance Industries is on its way to transforming itself into a homegrown technology behemoth. In the past three months, over 12 international technology firms have invested quite heavily into RIL’s digital arm Jio Platforms which has fetched RIL a total of ₹ 118,318.45 crores. Reliance, however, still looks quite an investment hungry!

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According to the latest rumors, another global tech heavyweight is considering investing in Jio Platforms as well.

Some insider sources, under the condition of anonymity, have revealed that Google, the California-based technology titan, has been discussing investment terms with Reliance Industries Ltd.’s digital arm, Jio Platforms. However, it is also mentioned that the talk is still in its early stages, and it could end up changing the market equations or even falling apart.

Google, founded in the year 1998 in Silicon Valley, entered India almost six years later with its first few offices in the cities Bangalore and Hyderabad. Since then its Indian arm has constantly strengthened its market presence to have a sizeable chunk of the pie as the country has over 500 million internet users with just 40% penetration. India is also the largest market for Google considering the world’s largest country, by the number of internet and smartphone users, China has banned Google. The tech behemoth has successfully launched several products specifically for India such as Google Internet Saathi which brings women in rural areas online and its popular Google Pay payment app.

Here, it needs to be noted that this particular information has arrived at an interesting juncture. Yesterday, Sundar Pichai, in ‘Google For India’ virtual conference, announced that the tech giant plans to invest $10 billion in India over the course of 5-7 years in the form of equity investments, partnerships, and operational infrastructure and ecosystem investments. 

So, now the current situation begs two very important questions; if Google plans to get the ball rolling by making their first investment in Jio Platforms and whether we will be finding out about the same in Reliance Industries’ 43rd Annual General Meeting scheduled to be held tomorrow.

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If this potential deal goes through, there is no doubt that it will be a phenomenal boost for Jio Platforms which is committed to establishing itself as a dominant player in digital categories such as online retail, content streaming, digital payments and so on.

Currently, most global technology players like Facebook, Amazon and Intel Corp., instead of focusing on increasing their revenue, are mostly looking to expand and get in on the ground floor of South Asian countries wherein millions of people are coming online for the first time and still a sizeable share of the market is untapped. In India, Jio Platforms has strategically been able to position itself as the obvious choice for international interest because it currently boasts almost 388 million users via its telecom arm.

It must be noted that Mukesh Ambani’s penultimate goal is to launch the IPO of Jio Platforms sometime next year. After achieving the milestone of debt-free RIL now Mukesh Ambani has apparently set his eyes to make JIO IPO an unprecedented public offering. Thus, if Google’s investment comes through it will definitely bloat up its Jio Platform’s valuation, currently stands at ₹4.91 trillion to a very large extent as well as add to its strategic value.

Besides, all such developments paint at a bigger picture as well; RIL is not too far away from establishing itself as a homegrown tech behemoth such as Jack Ma’s Alibaba Group in China which has an undisputed dominance on the country’s digital ecosystem.

All said and done, the news of Google investing in Jio can only be taken as a pinch of salt at this moment. It remains to be seen how the entire scenario unfolds in the days to come – if not tomorrow. Do let us know your views in the comment section below.

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