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Looks like the rumors were true… Google will invest $4.5B in Jio Platforms, a digital services and telecom company based in India. The investment will amount to a 7.7% stake in the “Tencent of India” whose valuation has ballooned to $65B.
Many people in India do not have access to the internet, and even less have smartphones. The windfall of cash into Jio could help provide affordable internet access to billions of people in a country where 73M people are in extreme poverty. And it seems to be working, as millions of people in the country gain access to the internet every month.
So, what’s the Jio-lio?
Jio is owned by Reliance Industries, a conglomerate owned by India’s richest man, Mukesh Ambani. Mukesh is in the process of selling 20% of Jio Platforms in an effort to raise cash to pay down Reliance’s debt.
The Jio Infocomm telecom network, operated by Jio Platforms, is India’s most used network, providing 4G service to nearly 390M people. Jio also offers music streaming and video conferencing apps, and just released Jio Glass, which is wearable glasses that can make video calls and access apps. Taking a page out of Snap’s Spectacles playbook? Bold strategy, cotton.
So, what are the plans?
Google will work with Jio to develop an affordable “entry-level” Android phone for the Indian market, which will help bring the internet to millions of users in India. Which sounds a lot better than saying they’re taking advantage of an untapped market in a developing country.
The $4.5B investment will come from the $10B Google for India Digitization Fund… which was set up earlier this week. Coincidental timing.
The bottom line…
But Google isn’t the only US “big tech” to do what it does best (read: stifle competition by investing in growing tech platforms to ensure they don’t become an existential threat).
This past April Facebook invested $5.7B in the telecommunications company. No word on when Hooli plans to take a stake.
Facebook and Google aren’t the only tech companies throwing Brinks trucks at Jio. Earlier this month, Intel announced a $250M investment, while Qualcomm said it would invest $97M.
And it doesn’t stop in the tech space, as KKR, General Atlantic, and even the UAE sovereign wealth fund are part of the proverbial gang bang of investors with cash injections over $1B. Have you no shame, Jio?
Water Cooler Talking Point(s)
💧 “How sure are we that Sameer didn’t send billions overseas because he got phished by an ‘Indian prince email offering a large stake in Jio’? ” (Nick, The Water Coolest HQ)
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