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US-based PE firms TPG and L Catterton become latest investors in Reliance’s Jio Platforms (Update)

Jio Platforms has divested a 22.3% stake for over USD 13.7 billion, from nine high profile investors.

Reliance Industries Ltd owned Jio Platforms, which till last week had raised USD 12.95 billion from leading global investors in a spate of eight rounds in seven weeks, is still at it with its fund-raising spree as more investors look to invest in the service.

RIL, the Mumbai-based conglomerate said Saturday it has raised USD 600 million from TPG by divesting a 0.93% stake of Jio Platforms. Hours later, it announced another round of funding from L Catterton, a US-based private equity firm which invested USD 250 million for a 0.39% stake.

In less than two months, Jio Platforms has divested a 22.3% stake for over USD 13.7 billion, bringing nine high profile investors including TPG, L Catterton, Facebook, KKR, General Atlantic, Vista Equity Partners, Abu Dhabi Investment Authority (ADIA), Mubadala, and Silver Lake on its cap table.

L Catterton, the 30-year-old PE firm is known for investing in technology-enabled consumer businesses. It has invested in brands such as Peloton, Vroom, ClassPass, FabIndia, and others. TPG has invested in a host of companies in India including internet startups such as online ticketing major Bookmyshow and omnichannel eyewear brand Lenskart.com.

Other than this, local media Economic Times (ET) said, Saudi Arabia-based Public Investment Fund (PIF) is also looking to put USD 1.5 billion in Jio Platforms, which, according to the report would be finalized in less than two weeks from now.

The developments come days after Jio Platforms said it has raised USD 750 million and USD 1.2 billion from two Abu Dhabi-based sovereign wealth funds: ADIA and Mubadala, respectively.

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Read this: Facebook sets up new entity to acquire stake in Reliance’s Jio Platform

Jio Platforms is comprised of Reliance’s suite of digital and telecom initiatives including devices, apps, content platforms, and tech capabilities related to Artificial Intelligence, big data, and Internet of Things. It operates digital services such as music streaming app JioSaavn, video streaming platform Jio TV, and fintech service Jio Money, among others. In 2016, it shot to fame through its dirt-cheap mobile connection which enabled millions of Indians from smaller cities and rural areas to get online.

RIL’s managing director Mukesh Ambani has pitched Jio Platforms to users as a next-generation technology platform, which is focused on providing high quality and affordable digital services across India.

Global PEs and sovereign wealth funds are vying to grab a pie of the three critical sectors in the world’s second-most populous country—telecom, technology, and e-commerce. Over the past five years, RIL has splurged money to acquire a substantial stake in all three sectors. Reliance has reportedly infused over USD 30 billion to build Jio Platforms.

By investing in Jio Platforms, investors—especially Facebook—would directly benefit from Jio’s 388 million users. Facebook, which kick-started RIL’s fundraising sprint with its whopping investment of USD 5.7 billion, is looking to expose its nascent payment platform WhatsApp Pay to Jio users.

Moreover, RIL has also received interest from internet giants Google and Microsoft that are ready to buy a 6% stake in Jio Platforms. However, the caveat is, only one of them would invest in the company. “It will be either Google or Microsoft in the last tranche. Reliance Jio will have to reject one…Google has been pursuing them from the same time as Facebook,” a source told Business Insider.

Reliance has had connections with both these companies in the past. While it played an indirect but major role in bringing users from smaller cities to explore Google’s platforms, it partnered with Microsoft in August last year to offer free internet connectivity and Microsoft Azure cloud services to tech startups and SMEs by 2021.

While investors are looking at exploiting RIL’s hold of the Indian market, including its strong position in smaller cities, Reliance aims to eliminate its USD 21.4 billion net debt by the end of this year by raising venture capital. It gathered a majority of the debt as it went for a rampant expansion of Reliance Jio Infocomm Ltd.

The latest investment by L Catterton values Jio Platforms at an enterprise value of USD 68 billion, which dwarfs it when compared with global digital behemoths such as Tencent, Alphabet, and Alibaba.

UPDATE: This story has been edited to reflect latest funding details from TPG and L Catterton in Jio Platforms.