Facebook (FB) - Get Report will invest nearly $6 billion in Jio Platforms, the digital technology arm of Indian billionaire Mukesh Ambani's Reliance Industries, in an investment that will give it a stake of almost 10% in the company and a foothold in one of the world’s fastest growing online markets.
Reliance announced Facebook will buy a 9.99% stake in Jio Platforms for approximately $5.7 billion, becoming its largest minority shareholder. Separately, Facebook said the deal would bring together JioMart, an e-commerce venture of Ambani and its WhatsApp platform, to enable people to connect with businesses.
Jio Platforms has several services under its umbrella, including Reliance Jio, a mobile network that has signed up nearly 390 million subscribers since launching three and a half years ago. Reliance also has a retail arm, and the deal includes a commercial partnership with Facebook-owned messaging platform WhatsApp that potentially paves the way for Facebook to monetize WhatsApp's 340 million users in India, according to Bloomberg.
The deal, Facebook’s biggest outside investment since its 2014 purchase of WhatsApp, gives the company a runway to expand in a country that is rapidly embracing online payment and e-commerce as more people get smartphones.
“India is a special place for us,” CEO Mark Zuckerberg said in a video posted on Facebook. “We’re also committing to work together on some critical projects that we think are going to open up a lot of opportunities for commerce in India.”
Zuckerberg has long aimed to roll out a digital currency as well as tools that let users make payments and buy and sell products over the social network’s messaging services in India.
Shares of Reliance Industries jumped as much as 12% on Wednesday, while shares of Facebook were up 6.14% at $184.28 in trading in New York.