On Tuesday, Facebook invested $5.7 billion in Jio Platforms, a subsidiary of Reliance Industries, one of India’s largest companies and the country’s top telecom carrier. The deal gives Facebook a 9.99% stake in Jio Platforms, making it the company’s largest minority shareholder. This is the largest investment by a foreign company in India’s tech sector.
Facebook said that the investment underscores the company’s commitment to India, where 560 million of 1.3 billion people are online. Facebook said that Jio, which started in 2016, has brought 388 million people online over the last four years.
“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,” wrote Facebook CEO Mark Zuckerberg in a post announcing the deal. “India has more than 60 million small businesses and millions of people rely on them for jobs. 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.”
India is the most important market for large American tech companies as they seek to find new users beyond the United States and Europe. Over the last few years, both Facebook and Google have turned their focus to the country, localized their products, and ramped up investment. More than 300 million Indians use Facebook, and more than 400 million people in India — nearly everyone with a smartphone — use WhatsApp, Facebook’s instant messaging app.
Jio, which was found by Mukesh Ambani, an industrialist who is India’s richest man, launched shortly afterward. The company pumped $35 billion to blanket India with an all-4G network, and brought millions of Indians online for the first time by making it nearly free to access unlimited data and voice calls.
Facebook will now be able to leverage these huge numbers. WhatsApp, for instance, has been working to get businesses to use the platform, while Facebook has created digital storefronts to help businesses sell goods and services online. Facebook announced that it would combine its efforts with Jio’s initiatives to build digital tools for small businesses.
“By bringing together JioMart, Jio’s small-business initiative, with WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience,” said a statement by David Fischer, Facebook’s chief revenue officer, and Ajit Mohan, Facebook’s managing director in India.
This is the first time Facebook has aggressively moved into the Indian market in the last four years. In 2015, the company tried to launch Free Basics, a program to bring millions of Indians online by allowing them free access to certain websites but not others. India’s regulators banned Free Basics in 2016 over concerns about net neutrality.