How Jio Became the Darling of Silicon Valley
Why have Facebook and Google invested billions into an Indian telecom company?
Few international companies have generated the kind of fundraising frenzy that Jio Platforms has over the past few months. The telecom operator, which is a subsidiary of Reliance Industries, India’s most valuable company, launched its services less than four years ago in 2016. It already boasts close to 400 million subscribers.
In April, the company announced it had secured $5.7 billion in funding from tech giant Facebook. In the months that followed, barely a week went by without Jio adding a new investor to its roster: private equity firms like Silver Lake and KKR, sovereign wealth funds like the Saudi Public Investment Fund, and strategic investors like Intel and Qualcomm all announced they were investing in the company. And in July, Jio announced that Google was investing $4.5 billion. In a matter of just four months, Jio had raised some $20 billion from external investors. And all this in the middle of a pandemic. Jio, now valued at about $65 billion, managed to raise more money than the entire startup ecosystem of India did in 2019.
Very few telecom companies are at the receiving end of the kind of attention Jio has received. Few can value themselves like a technology company; fewer still can get both Facebook and Google on board as investors and maintain a strategic partnership with Microsoft (which was also allegedly in talks to invest). Add to this the fact that the core business of Jio’s parent company, Reliance, is oil and gas (more than 50% of the company’s revenue from 2019 to 2020 came from its refining business). Where did Jio come from, and how did it suddenly become the darling of Silicon Valley?
From oil to mobile internet
Jio’s parent company, Reliance, was founded by Dhirubhai Ambani in 1966 as a trading business. Ambani started out trading synthetic yarns, which were in high demand due to the lack of industrial capacity in the country to produce synthetic fabric. Over the next 40 years, Reliance became an industrial powerhouse by expanding into manufacturing and began venturing into petrochemicals, petroleum refining, and oil and gas exploration. Reliance was a rare example of a…