Facebook invests $6 billion in digital assets of India’s richest man

Facebook is seeking a broader foothold in its biggest global market.

Facebook invests $6 billion in digital assets of India’s richest man

Facebook Inc. will invest $5.7 billion in the digital assets controlled by India’s richest man, as the U.S. social-networking giant seeks a broader foothold in its biggest global market.

The U.S. company will buy about 10% of Jio Platforms, becoming the largest minority shareholder, Reliance Industries Ltd. said in a statement Wednesday. Separately, Facebook said the deal would bring together JioMart, an ecommerce venture of Mukesh Ambani and its WhatsApp platform to enable people to connect with businesses.

The deal values Jio Platforms at a pre-money enterprise value of about $66 billion, the Indian company said.

The partnership with Jio would allow Facebook Chief Executive Officer Mark Zuckerberg to step up his expansion in a country that is rapidly embracing online payment and e-commerce as more people get smartphones. Reliance Jio Infocomm Ltd. burst onto the Indian wireless telecommunications market about four years ago, quickly moving into a position of dominance by offering free plans and undercutting rivals. Working with Facebook would be a boost to the ambitions of Ambani, until recently the richest man in Asia, who has been remaking his energy conglomerate as India’s first titan of e-commerce.

The purchase is Facebook’s biggest since its 2014 acquisition of WhatsApp and an unusual bet for a company that typically buys into media and online properties. It underscores the potential it sees in India, which unlike China is an open market with an exploding smartphone population. Facebook may benefit from a well-connected ally in the country, where Facebook’s Whatsapp is trying to launch a payments service but has run afoul of regulatory scrutiny over fake news and privacy concerns.

Alluring Market

“This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country,” Facebook said in its statement.

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.

With its half-billion internet users, the South Asian country is an alluring market for the world’s largest technology companies, including Amazon.com Inc., Apple Inc., Microsoft Corp. and Alphabet Inc.’s Google. In India, Facebook has about 250 million users, while WhatsApp has over 400 million.

While India will be a testing ground for WhatsApp payment services — currently in pilot — Zuckerberg is also separately looking at the market for his crypto-currency project called Libra. Zuckerberg has said that payments and commerce are a priority, representing a major business opportunity for the company moving forward.

For Ambani, 63, the deal with the technology giant comes as a boost at a time when his group is battling the impact of the coronavirus pandemic and a slump in demand for crude oil. He has also been seeking to reassure investors that he will honor a pledge to reduce the group’s net debt to zero.

The Indian company spent almost $50 billion — mostly borrowings — to build Jio Infocomm, the mobile carrier, leading to a net debt of more than $20 billion as of March 2019. In August, he told shareholders that he planned to sell a stake in Reliance Industries’ oil-and-chemicals division to Saudi Arabian Oil Co. as part of a road map to cut net debt to zero by March 2021.

With the Aramco negotiations dragging on for months, the global health crisis and the crash in oil prices have also raised doubts if that deal will be signed. As a result, shares of the Mumbai-based conglomerate plunged as much as 45% from their Dec. 19 record, before rebounding from their March 23 low.

After building a wireless carrier and a retail business, Ambani has said he plans to rope in “leading global partners” before initial public offerings as he readies an e-commerce business that would rival Amazon and Walmart Inc. in the South Asian country.

The new businesses are likely to account for 50% of Reliance Industries Ltd.’s earnings in a few years, versus a little more than 32% now, Ambani told shareholders in August.

Jio Platforms, a wholly owned unit of Reliance Industries, brings together Jio’s digital apps, ecosystems and the wireless carrier’s platform under one umbrella, according to Reliance Industries.

Reliance Industries and Facebook denied an Indian media report last week that they are considering creating an app similar to WeChat, the Chinese mobile messaging and payment service run by Tencent Holdings Ltd.

“The intent is not to build another app, the intent is really for the two companies to collaborate,” said Ajit Mohan, vice president and managing director for India at Facebook.

Now that the deal has been formally announced, the companies will start working with Indian regulators to seek approval, said Anshuman Thakur, Jio’s head of strategy.

Facebook has not been consistently welcomed by Indian regulators in the past. It ran into opposition while trying to launch a payments feature inside WhatsApp in 2019, and has also faced pushback around content regulation on the app, which is encrypted. Facebook tried — and failed — to bring a service to India in 2015 called Free Basics, which would have made some internet services, including the social network, free to use on mobile devices. Critics said the app violated the concept of net neutrality by prioritizing some services over others.

“Given the intent of this collaboration and the nature of this partnership, we expect people to be welcoming,” Thaku said.

More must-read international coverage from Fortune:

—Controversy around privacy splits —Crude math: Why $10 oil could be worth less than nothing
—Why China will recover faster from the coronavirus pandemic than the U.S.
—Coronavirus lockdown diets look the same the world over
—Listen to , a Fortune podcast examining the evolving role of CEO
—WATCH: The global crisis in recycling
Subscribe to Fortune’s forthcoming Eastworld newsletter for expert insight on what’s dominating business in Asia.

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Co-creating the world of inclusion that we want to come next

The coronavirus pandemic is a chance to center marginalized voices in the new normal still to come.

Co-creating the world of inclusion that we want to come next

This is the web version of raceAhead, Fortune’s daily newsletter on race, culture, and inclusive leadership. To get it delivered daily to your inbox, sign up .

Back in September, when people still went places and did things, my stepson became a high school freshman. He attends a different school from his older sister, so we didn’t know many of the other families. Suddenly, the fall orientation season became an interesting exercise in meeting new people and introducing ourselves.

There had been, it seemed to me, an unusually high number of “welcome” events for incoming students, and I guess that my stepson’s mother and I had been to enough of them alone together to have something happen that I did not see coming: We were mistaken for same-sex parents. 

It was the most awkward and thrilling thing imaginable. 

The compliments about our son. The inclusion signaling. The we-so-approve-of-you smiles. What a status upgrade! I’d gone from a modern version of the fairy tale homewrecker to a person with rights. No longer an object of suspicion, for a brief shining moment, I had a whole damn month I could claim. I hadn’t even realized how much I needed the affirmation.

Finally, my soon to be ex-wife gently broke the news. “Actually,” she began, very kindly, “she’s the stepmom.” The lovely opposite-sex couple we were chatting with blinked. “Hey,” said the wife, “however you want to call yourselves…I get it.” She beamed. I beamed. Our son smirked and sidled away.

The incident got me thinking about all the relationships in our lives—the people we interact with either by accident or design—that do not rise to the acknowledgment of an official name. It felt like an interesting and delightful moment for my stepson’s mom and me (see? no name).

But for so many others, these unnamed ties are the people who see you and the relationships that save you. They’re often found in activist spaces, filled with people forged into deep bonds by a common opposing force. These are the chosen families, the corporate resource group safe havens and other communities who should take a central role in co-creating a world that wants to come next. 

If “we” let them, of course.

Mia Birdsong is an extraordinary student of human communities; an activist, writer, and author of How We Show Up: Reclaiming Family, Friendship, and Community. The book, she says, is an extension of her broader work of understanding how families, friendships, movements, and communities can sustainably thrive. 

It’s smart to look beyond social norms for clues, she says.

“The people who I’ve seen build the most expansive, loving, inclusive powerful strong versions of relationships are queer people, Black people, poor people, unhoused people, sex workers,” she says. “You know, people for whom the American dream—they’re excluded from it to some degree.” What we’ve been told is a successful life—nuclear family, independence, and “pulling yourself up by your bootstraps”—is antithetical to who we are as human beings, she says.

The expertise that exists in these unnamed spaces can offer a model for what comes next. “Right now, we are all glaringly aware of our deep interdependence.” Centering that expertise also does double duty. “[It] positions marginalized people as keepers and holders of that wisdom and knowledge,” says Birdsong.

I also turned, as I often do, to David Kyuman Kim, a writer, convener, and professor whose work focuses on religious studies, race, moral theory, and public life. I asked him for his thoughts on the liminal space we’re all in together.

“This is really the work of inclusion,” he says. “It’s really to say, ‘look, everything that we thought was the norm was insufficient.’ And now, what’s coming out of this time, whatever this time is, is revealing this insufficiency, and who has always been excluded and why.”

This will lead to hard conversations, he says, calling for humility and courage.

“I know you’ve heard me say this before, that the root of the word courage is a French one, ‘coeur,’ which means heart,” he says, touching over his coeur on Zoom.

“So how do we show up with our hearts in this moment? Knowing that our hearts are battered and bruised?” Everyone is experiencing a loss, some more profoundly than others. And recognizing that business—and inclusion—as usual has been insufficient, may also feel like a type of loss. But, he says, we can build on that.

And maybe even learn a new social norm. “I don’t like being moralistic, but hopefully we come out of this with an increased impatience for the selfish amongst us,” he says.

Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com

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