With the entry of China’s ByteDance into the internet market, Facebook has surely found a tough competitor in the market now. No matter what, Facebook has been enjoying a very good ride in the markets of India. Still, with the new competitor in the scene, the American Tech Giant Company has found a better place to invest in. It was today that Facebook announced that the company would be investing a massive amount of $5.7 Billion in India’s Reliance Jio, making it the stakeholder of almost 9.99% of Jio.
Reliance Jio has only completed three and a half years of being a subsidiary in India. Still, it soon became one of the most valued firms and the biggest telecom operator in India. Currently, Reliance Jio has more than 370 million subscribers. So, it is not a big surprise that Facebook has decided to bet on it, as the company surely feels like this horse is riding until the end of the market.
The pre-money valuation of Reliance Jio is at $65.95 Billion. With the investment of Facebook, the company marks itself as the largest minority shareholder in the Indian market of the Telecom industry. Facebook Company released a statement where they mentioned that their investment marks their commitment to India, and the company will also be focusing more on collaborating with Jio to bring “new ways for people and businesses to operate more effectively in the growing digital economy.”
There are many collaborations in the process, but the most speculated one is the JioMart. As per David Fischer, the Chief Revenue Officer of Facebook and the VP and Managing Director of Facebook India, Ajit Mohan, the JioMart will be an e-commerce venture which will be a conjoint of both Jio and Reliance Retail along with WhatsApp. India is the biggest contributor to this online chatting app, with more than 400 million users. Almost every user in India has the WhatsApp smartphone app installed in their device.
According to both David Fischer and Ajit Mohan, “We can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience.”
Reliance Jio was launched in the year of 2016, and it was in the second half of it when the company started its commercial operation. Jio began by offering users unlimited 4G services with free calling and texting at no cost. It forced various other competing telecom industries such as Vodafone, Idea, and Airtel to reduce their price by a great mark and also revise their data plans. With the entry of Jio in the market, the telecom industry saw a revolution. No wonder, Jio became the top telecom operator in a matter of just a few months.
Previously, Facebook had attempted very hard to expand its initiative Free Basics in India, which was a free internet module, but failed. The sudden interest of Facebook in Jio now is a certain indication that the company sees potential and prospects in bringing back Free Basics with the help of Jio now.
Mark Zuckerberg, the CEO of Facebook, took to his twitter handle and wrote, “We’re making a financial investment, and more than that, we’re committing to working together on some major projects that will open up commerce opportunities for people across India.”
It has come to light that Facebook has already started taking a lot of keen interest in various Indian Startups as well. Last year the company made a small investment in Meesho, which is an app for women to work from home by selling products via the app. Another startup by edtech called the Unacademy received a massive cheque amount from Facebook. Both these startups have an investment of $15 million each from the tech giant company.
While speaking to a leading news portal called the TechCrunch, Ajit Mohan said, “Wherever we believe there is an opportunity beyond the work we do today, we are open to exploring further investment deals.” This statement makes it very clear that the Facebook Company is looking for startups and new businesses that are building better solutions and creating more investment opportunities.