Google has become the latest high-profile firm to back India’s Reliance Jio Platforms. The search giant is investing $4.5 billion for a 7.73% stake in the top Indian telecom network, Reliance Industries chairman Mukesh Ambani said on Wednesday.
The investment today from Google is one of the rare instances where the Android-maker has joined its global rival Facebook in backing a firm.
Facebook invested $5.7 billion in Reliance Jio Platforms, which has amassed over 400 million subscribers in less than four years of its existence, in April this year for a 9.99% stake in it. Facebook is the largest minority stakeholder in Jio Platforms.
Jio Platforms, a subsidiary of Reliance Industries (India’s most valued firm) has raised about $20.2 billion in the past four months from 13 investors by selling about 33% stake in the firm.
As part of Wednesday’s strategic announcement, Google and Reliance Jio Platforms will work on a customized-version of Android operating system to develop low-cost, entry-level smartphones to serve the next hundreds of millions of users, said Ambani. These phones will support Google Play and future wireless standard 5G, he said.
Google’s new investment gives Jio Platforms an equity valuation of $58 billion — the same valuation implied by Facebook. Other investors including General Atlantic, Silver Lake, Qualcomm, Intel, and Vista have paid a 12.5% premium for their stake in Jio Platforms.
Google, which like Facebook reaches nearly every online user in India, announced a new fund on Monday through which it said it plans to invest $10 billion in Asia’s third largest economy over the next five to seven years. Its investment in Jio Platforms today is the first investment from the Google For India Digitization Fund.