Silver Lake Partners on Monday invested ₹5,665 crore in Jio Platforms for a 1.15% stake. This was at a 12.5% premium to Facebook’s ₹43,574 crore ($5.7 billion) deal for a 9.99% announced on 22 April.
So, what has made Jio Platform a darling of investors?
It is Jio Platforms’ multiple revenue streams from the same user base.
Jio Platforms is a subscription driven model and has a lot of consumer data. It uses latest technology and cloud computing for delivery which decouples revenue from the number of users or subscribers that one has. Which means that the more times the same customer base is used for multiple revenue mechanism, the higher the valuation is.
“And for an investor this is pretty shining and the growth in user base is also good quarter-on-quarter. When you are able to add that kind of subscriber base and do multiple times monetisation, then of course it makes it very interesting as a company,” said Sanchit Vir Gogia, founder and chief executive, Greyhound Research, a technology research and advisory firm.
Jio Infocomm, on the other hand, is capex heavy, and has a linear revenue model so it does not offer much in terms of valuation.
P.S.: To read a research report on the investments in Jio Platforms, click here.
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Technology & Innovation Research & Advisory firm. To read more about him, click here.
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