By
Chimamanda U. Martha
April 12th, 2024
According to Facebook, the aim of the investment in Jio Platforms is to create “new ways for people and businesses to operate more effectively in the growing digital economy.” FB stock is rising in the pre-market.
Facebook Inc (NASDAQ: FB) stock showed not the best performance yesterday, closing 4.17% down at $170.80 per share. But it added 3.26% in the pre-market to trade at $176.37. The rise followed the announcement of Facebook about its investment in the Indian internet giant Jio Platforms.
Putting as much as $5.7 billion to Jio Platforms, Facebook buys a 10% stake and becomes its largest minority shareholder.
Facebook provided a comment:
“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.”
The deal followed Facebook’s WhatsApp securing approval to launch its digital payment service in India. It will now be able to make competition to the likes of Google Pay and Paytm.
Currently, there are 400 million WhatsApp users in India. Facebook’s move is a big push to the country which will further increase the popularity of the app.
According to the social media giant, the aim of the initiative is to create “new ways for people and businesses to operate more effectively in the growing digital economy.” It will supplement also Jio’s business activity with the “power of WhatsApp” to help businesses and shop connect on a larger scale.
Facebook explained:
“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 first experience of this powering up will be JioMart that connects customers to mom-and-pop stores.
About Jio Platforms
Jio Platforms is a part of Reliance Industries Limited, an Indian multinational conglomerate that owns businesses in the energy, petrochemicals, textiles, natural resources, retail, and telecommunications industries. Besides, Jio Platforms has been a sort of an umbrella platform for all Reliance’s digital businesses. They include Reliance Jio, MyJio, JioTV, JioCinema, JioNews, and JioSaavn.
Being the largest digital platform company in India, Jio Platforms has brought millions of dollars to the Indian economy. Its vision is to ensure a “Digital India” for 1.3 billion Indians and Indian businesses, entrepreneurs and farmers. Jio has already transformed the Indian digital services space. It has also put the country on the path to becoming a global technology leader.
The deal with Facebook values Jio Platforms at a pre-money enterprise value of about $66 billion.