Vista Equity Partners, a US-based private equity firm that runs the world’s largest exclusively tech-focused fund, will pick up a 2.32 percent stake in Jio Platforms for Rs 11,367 crore, making it the third high-profile investment in the Reliance Industries Ltd (RIL) unit in as many weeks and underlining its status as a next-generation software and platform company.
This investment values Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. Vista’s investment, which makes the largest investor in Jio Platforms behind RIL and Facebook, is at a 12.5 percent premium over the deal with the social media network announced in April.
Jio Platforms has now raised Rs 60,596.37 crore from leading technology investors in less than three weeks, RIL said in a statement on May 8.
Vista has a track record of investing in cutting edge tech companies in their early stage. Each of its investments has been profitable in its history of 10 years. This is the PE giant’s first sizeable investment in India.
Validation for Jio’s tech-enterprise prowess
The latest investment reaffirms Jio as a strong tech-enterprise focused on one of the most exciting and large markets in the world and emphasises the quality of management. Vista’s investment showcases Jio as the next-generation software and platform company. It also is an endorsement of Jio’s tech capabilities and the potential of the business model even in this COVID-19 world and beyond.
The investment reaffirms Jio’s continuing attraction among global investors for its deep understanding of the Indian markets, the rapid digitisation opportunity post-COVID and its capabilities to bring cutting-edge technologies and tools such as AI, Blockchain, AR/VR and Big Data into play for all Indians.
In April, Facebook bought a 9.9 percent stake in Jio for Rs 43,574 crore. This was the social media powerhouse’s biggest investment since its $22 billion buyout of WhatsApp in 2014. On May 4, American private equity giant Silver Lake Partners purchased 1 percent of Jio Platforms for Rs 5,655.75 crore.
Commenting on the transaction with Vista, Mukesh Ambani, chairman and managing director, Reliance Industries Ltd, said he was delighted to welcome Vista, one of the world’s marquee tech investors globally as a valued partner. “Like our other partners, Vista also shares with us the same vision of continuing to grow and transform the Indian digital ecosystem for the benefit of all Indians. They believe in the transformative power of technology to be the key to an even better future for everyone.”
Commenting on the investment, Robert F Smith, founder, chairman and CEO of Vista, said, “We believe in the potential of the Digital Society that Jio is building for India. Mukesh’s vision as a global pioneer, alongside Jio’s world-class leadership team, have built a platform to scale and advance the data revolution it started. We are thrilled to join Jio Platforms to deliver exponential growth in connectivity across India, providing modern consumer, small business and enterprise software to fuel the future of one of the world’s fastest growing digital economies.”
Diverse marquee investors are becoming long-term shareholders of Jio Platforms because of a unique set of technologies and platforms under one entity. There are no similar opportunities available anywhere else globally.
What do we know about Vista Equity Partners?
Vista Equity Partners is an investment firm that exclusively invests in tech and software companies, including enterprise software, data, and technology-enabled organizations across private equity, credit, public equity, and permanent capital strategies. With more than $52 billion in capital commitments, it is now the world’s largest tech focused Fund. This includes a $16-billion tech fund raised by it in 2019 – the largest ever single tech fund raise by an independent private equity firm, Vista acts as a value-added investor with a long-term perspective and contributes professional expertise and multi-level support towards companies to realize their full potential.
The firm was founded in 2000 by American businessman and investor Robert F Smith and Brian Sheth. Its portfolio constitutes more than 60 enterprise software, data and technology enabled companies across the world. Some of its top investments include Solera, Tibco and Inflobox.
Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels. Kirkland & Ellis LLP and Shardul Amarchand Mangaldas & Co served as legal counsels to Vista.
Disclosure: [Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.]