Jio Platforms – Silver Lake Deal Analysis: A Step Closer to Digital Economy 2.0
US private equity firm Silver Lake announced an investment of USD 747 million (INR 5,655.75 crore) in Jio Platforms for a 1.15% stake on 4th May 2020, striking a deal with Jio less than two weeks after Facebook’s investment into Jio Platforms. The deal values Jio at $65 billion – a 12.5% premium to the value indicated by Facebook.
Silver Lake is a globally respected private equity firm with investments in technology companies, both large established firms, as well as, startups, with USD 40 billion in total AUM. Recent investments in E-commerce and financial technology include the Alibaba Group, Fanatics, Inc., Ant Financial, Credit Karma, and Blackhawk Network, among others.
The deal comes at a time when Reliance is working to pare down the group’s debts. In the midst of a pandemic, this deal coming into India stands testimony to the potential opportunities with data-led businesses in India.
What to expect for the Indian economy?
- This deal can transform the retail market by significantly boosting digital consumer reach and monetization of transactional data and insights.
- With this latest funding support, Jio Platforms will trigger growth of and series of large-ticket investments in consumer-experience digitization in India.
- Low-cost digital services using social engagement tools will bring millions of suppliers in direct interaction with their target end-consumer base, enabling hyper-localization on the basis of cultural and behavioral consumption patterns.
- Consumer-experience digitization will further create an impetus for emerging Deeptech solutions to converge, bringing forth opportunities that combine AI, Blockchain, IoT, AR/VR, and Big data at a massive scale to provide out-of-the-box digital experiences to Indians.
- More such digital tech deals have the potential to push as-a-service and a digital as the foundation to drive India’s growth into the Techade to 2030.