Jio Platforms attracting funds from Facebook, Silver Lake, Vista Equity, highlight Mukesh Ambani's digital-era venture capitalist avatar

In a  mystery titled Silver Blaze, Sherlock Holmes finds an important clue in "the dog that did not bark at night". We may invoke a parallel with the famed detective to see how Mukesh Ambani-led Reliance Industries Ltd (RIL) is changing colours in the 21st century. Look hard at the fact that Jio Platforms Ltd, officially a subsidiary of RIL, no longer contains the word "Reliance" that has been associated with the Ambanis for five decades now.

File image of Reliance Chairman Mukesh Ambani. YouTube screengrab

Thereby hangs the tale of how Ambani is morphing from a manufacturing-era industrialist to a digital-era venture capitalist in a new phase of career growth and entrepreneurship. It might be wise to shed the "oil-to-telecom" tag for RIL and increasingly more apt to describe it as an investment powerhouse.

What is fascinating in this journey is that a significant amount of the traditional Ambani expertise is still at work, especially RIL's propensity to engage millions of Indians, customers, and shareholders alike. But the billionaire is increasingly embracing a chaotic business universe in which engaging the unknown and the positive possibilities it contains is dramatically different from the relatively controllable landscape in which RIL made its mark to emerge eventually as an Indian textile-to-technology giant.

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Over the past month even as most of the world grappled with the uncertainties surrounding the COVID-19 pandemic, Jio Platforms has been inducting new investors in a marked departure of style from the old-world Reliance, for which the approach was to induct (if at all) "joint venture" partners before taking the IPO (initial public offer) route.

After social networking Facebook Inc became a marquee investor in Jio Platforms with a $5.7 billion (Rs 43,574 crore) investment, Silicon Valley-based Silver Lake Partners stepped in to announce a Rs 5,655 crore round of funding at a 12.5 percent higher valuation of Rs 515,000 crore.  Now we have Texas-based Vista Equity announcing an investment of Rs 11,367 crore in Jio Platforms for a 2.32 percent stake.

Early indications about how Jio will serve shopkeepers and small businesses across India through digital initiatives show a tremendous capacity for scaling. We are yet to see a big roll-out but Jio Mart can be described as an arranged marriage of convenience between old-world shops and new world supply chains with procurement muscle, blessed by community technologies such as the Facebook-owned WhatsApp that bring in high-speed information and digital cash. Data nationalism might also help Jio take on giants such as Amazon in India as a technological hypermarket.

In the new normal for RIL, the new investors in Jio are more like knowledge and network partners. It would be misleading just to look only at the financial numbers of their deals. What it means is that Silver Lake and Vista will bring their expertise in building partnerships and teams to create digital-age value and also open doors for powerful linkages in the US and possibly, rest of the world, in a manner under which India's software army and the American penchant for creating intellectual property come together for common goals.

What is possible in such a scheme of things is not necessarily the growth of Jio Platforms as a single entity with a future IPO but also as one under whose roof new giants could be incubated or spun off.

Consider this: the $52 billion Vista Equity fund specialises in technology and software whose arms stretch into equity, credit and other forms of capital deployment. Its investee companies include cloud-based information management specialist Tibco, digital security specialist Inflobox and digital identity leader Solera. Now, just imagine the possibilities from IP investments and services by these three companies into Jio.

Similarly, Silver Lake's investee companies include Airbnb (a cloud hotel chain of sorts), Dell (cloud storage and PCs) and Twitter (community building) and Alibaba (e-commerce).

What Jio Platforms potentially gains from new partnerships is the muscle to mix the five big Cs to serenade the biggest C of them all -- Convergence. By bringing in Connectivity, Commerce, Community, Content and Cloud strung up together by the familiar old C -- Capital -- what Ambani is mixing is a new-age cocktail. This admixture, on the one hand, builds a digital age behemoth for India and on the other the distant but real possibility of IP-based companies.

So what does RIL itself bring to the table? Apart from the 387-million-connections strong Jio network, it has already built and the potential synergies shopkeepers and small businesses may have with giant Reliance Retail, the Ambani touch brings in its traditional hands-on approach to project management. Add to this the corporate folklore that Reliance group founder Dhirubhai Ambani told his son Mukesh to engage 20 percent of Indians in his future businesses, and we have a demographic approach to entrepreneurship that complements the IP-based approach its new partners bring in.

Nobel laureate VS Naipaul once wrote about how Dhirubhai brought in a polyester revolution to India when clothing was not easily affordable. We could say digital platforms are the new polyester to similarly engage a fifth of India's population in the aspirational part of the country's social pyramid.

Now, look back at Reliance as a corporate phenomenon. In the 1970s it was mostly a textile trader. In the 1980s, it became a polyester manufacturer, in the 1990s a vertically integrated petrochemical titan and in the first decade of the new millennium, a diversified conglomeration with an interest in telecoms. As the second decade of the new century ends, the arms are stretched into digital technologies. But what is significant is that unlike the controllable integration of the old world, the new era is less of an industry and more of a loose ecosystem in which business-to-business customers are better seen as partners.

In such a universe, Mukesh Ambani, alongside Facebook co-founder Mark Zuckerberg and investors Silver Lake and Vista, is more like a co-creator and co-investor. However, there are important technologies that these private equity players will bring in that resemble the kind of expertise that Bechtel Corp brought to RIL when it was expanding in the oil-and-petrochemicals sphere. As one author wrote then, "RIL has parlayed the unique aspects of the local context to its advantage". You may also call it traditional Gujarati business acumen, something Mukesh himself talks of sometimes as he employs the old approach in a new industry.

It is equally true that Ambani, who turned 63 last month, is getting older and the conglomeration he rules over is more complex than ever before. It pays to remember that RIL has also invested in a clutch of startups and Mukesh Ambani in his personal capacity holds 50 percent in Tally Solutions, an early leader in small business accounting software for Indian firms.

I had written last year on how new-age RIL might become more like Tata Sons, the holding company of a diversified conglomeration with several listed companies. Or Jio Platforms may resemble an Amazon or a Microsoft lording over an ecosystem of millions of small businesses hanging by its coattails (hence the name Platforms) and paying monthly fees for a bouquet of software apps and accompanying services.

As things become big, we may well see RIL and/or Mukesh Ambani staging a VC-style "exit" with a huge cash pile as Jio Platforms becomes an independent company.

The writer is a senior journalist and commentator. He tweets as @madversity

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost.