Excited to invest in India’s vibrant digital economy: Facebook

Facebook and Reliance-owned Jio Platforms announced a $5.7 billion deal that will allow the US social media giant to acquire nearly 10% stake in the Indian telecom venture in a significant development that saw markets rebound sharply from the recent volatility due to the pandemic.The news brought optimism to the markets after weeks of lackluster activities. The Reliance Industries Ltd. stocks rose by 6.8% at Rs1,320.55 on the BSE in early trade on April 22, while the Facebook shares saw a high of 3% at the close on NASDAQ.Both sides, in separate statements, said that they will work together on projects that will open up new business opportunities for people.

In a statement, Facebook CEO Mark Zuckerberg said: “There’s a lot going on in the world right now, but I wanted to share an update on our work in India. Facebook is teaming up with Jio Platforms — we’re making a financial investment, and more than that, we’re committing to work together on some major projects that will open up commerce opportunities for people across India.”

“This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country. In less than four years, Jio has brought more than 388 million people online, fueling the creation of innovative new enterprises and connecting people in new ways. We are committed to connecting more people in India together with Jio,” Facebook said in a post.

Facebook said that its investment, Rs43,574 crore for a 9.99% stake, will enhance businesses operations in a growing digital economy. The new capital will boost the value of Jio Platforms to Rs4.62 lakh crore.“Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India. They account for the majority of jobs in the country, and form the heart and soul of rural and urban communities alike. In the face of the coronavirus, it is important that we both combat this global pandemic now, and lay the groundwork to help people and businesses in the years to come,” the social media giant said.

“One focus of our collaboration with Jio will be creating new ways for people and businesses to operate more effectively in the growing digital economy. For instance, by bringing together JioMart, Jio’s small business initiative, with the power of WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience,” it added.

“India is a special country for us. Over the years, Facebook has invested in India to connect people and help businesses launch and grow. WhatsApp is so ingrained in Indian life that it has become a commonly used verb across many Indian languages and dialects. Facebook brings together friends and families, but moreover, it’s one of the country’s biggest enablers of growth for small businesses. And Instagram has grown dramatically in India in recent years as the place where people follow their interests and passions,” Facebook said.

“We are excited about furthering our investment in India’s vibrant digital economy. Our efforts with Jio will be focused on opening new doors and fueling India’s economic growth and the prosperity of its people. We look forward to working with Jio, and to future collaborations in India to advance this vision,” it added.

“This investment by Facebook values Jio Platforms at Rs4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of Rs70 to a US Dollar). Facebook’s investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis,” RIL said in a statement. Reliance Jio, with 388 million subscribers, will continue to remain a wholly owned subsidiary of Reliance Platform, it added.

RIL said that this was the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India. “At the core of our partnership is the commitment that Mark Zuckerberg, founder of Facebook, and I share for the all-round digital transformation of India and for serving all Indians. In the post-Corona era, I am confident of India’s economic recovery and resurgence in the shortest period of time. The partnership will surely make an important contribution to this transformation,” said Mukesh Ambani, chairman and MD of RIL in the statement.

“In the very near future, JioMart – Jio’s digital new commerce platform, and Whatsapp – will empower nearly 3 crore small Indian Kirana shops to digitally transact with every customer in their neighbourhood. This means all of you can order and get faster delivery of day-today items, from nearby local shops,” Ambani said.

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