Trying to secure its position in a key overseas market, Facebook is investing $5.7 billion in Jio Platforms -- the digital division of Indian telecommunications giant Reliance Industries.
“India is home to the largest communities on Facebook and WhatsApp and a lot of talented entrepreneurs,” Mark Zuckberg said on Wednesday.
“The country is in the middle of a major digital transformation and organizations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online,” said Facebook’s cofounder-CEO.
Per the deal, Facebook is securing a nearly 10% stake in Jio Platforms, which will make it the largest minority shareholder in the prized unit.
Zuckerberg said he’s committed to working with Jio’s leadership on “some major projects that will open up commerce opportunities for people across India.”
Putting the pact in the context of the current pandemic, Facebook’s chief executive said he was interested in developing new services for India’s small business community.
“India has more than 60 million small businesses and millions of people rely on them for jobs,” Zuckerberg said. “With communities around the world in lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses.”
Among other tie-ins, Facebook’s WhatsApp unit is expected to compliment Reliance Industries’ JioMart service in helping Indian grocers connect with local customers.
To be more precise, WhatsApp will help nearly 30 million grocers across the country, Mukesh Ambani, Reliance Industries’ CEO, said on Wednesday.
Addressing all Indian citizens in a video statement, Ambani said: “Together, our two companies will accelerate India’s digital economy to empower you, to enable you, and to enrich you.”
Particularly popular in India, WhatsApp boasts roughly 400 million users throughout the country. That’s considerably more than the approximately 250 million Indians who use Facebook’s flagship app.By Reliance’s calculation, Facebook’s investment values Jio Platforms at a pre-money valuable of approximately $66 billion.