By Ashwini Agarwal
First publised on 2020-07-16 13:16:16
Google CEO Sundar Pichai committed to investing Rs 75,000 crore in India after his recent talk with Prime Minister Modi. Out of this, Google is investing Rs 33,737 crore in Jio Platforms. Although this was reported in the media a day before, the exact amount of investment was confirmed by Mukesh Ambani at the AGM of the Reliance Industries Ltd. (RIL) yesterday. This gives Google a 7.7% stake in the RIL subsidiary and a seat on the board. It puts the value of Jio Platforms at Rs 4.36 lakh crore.
In a period of extraordinary consolidation, Mukesh Ambani has kept his word and is on track to make RIL completely debt-free. In Jio Platforms alone, investors have committed Rs 152,056 crore, making it the largest investment by investors in a startup. It also gives the company the strength to take up all its projects with a renewed zeal.
Google is also going to help Jio with the design and manufacture of low-cost entry-level smartphones to help the vision of "a smartphone for every Indian" and help in further increasing the penetration of the internet in India. The two will also develop and optimize the Android operating system. The deal is a win-win situation for both as Google can leverage Jio's enormous content bank while Jio can ride on Google's technology.
By getting big names to commit enormous amounts as an equity investment in Jio, RIL has shown that an Indian startup need not depend on Chinese funds to scale up. If the idea is scalable and the product is viable, it is possible to attract the top technical giants to invest. Of course, every startup founder is not Mukesh Ambani, but he has shown that it can be done. Obviously the valuation and the quantum of investment will be much smaller in other startups, but if they have the idea and the product, they too can now hope to attract the US tech giants directly.