Buffett's Berkshire in talks to invest in India's Paytm: report

August 27, 2018 15:19
Berkshire Hathaway, controlled by legendary US investor Warren Buffett, is reportedly eyeing a stake in Indian digital payments firm Paytm. Photo: Reuters

Billionaire US investor Warren Buffett, who stayed away from tech companies until a few years ago, is said to be in talks to invest in the parent company of Indian digital payments firm Paytm.

According to India's Economic Times newspaper, Buffett's holding company Berkshire Hathaway is in negotiations to pick up 3-4 percent stake in One97 Communications, the entity that controls Paytm.

If the talks succeed, Berkshire could invest 20 to 25 billion rupees (about US$285 to US$356 million) in the Indian firm, marking Buffett's first direct investment in an Indian startup, the report said, citing people familiar with the matter.

Paytm's existing key investors include China's Alibaba Group and Japan's SoftBank Group.

Engaged in mobile payments and online financial services, Paytm's digital wallet has nearly 300 million users. The company said last month it has touched US$4 billion in monthly gross transaction value (GTV) in the quarter ended June.

The homegrown fintech startup, which was founded in 2010 by an entrepreneur named Vijay Shekhar Sharma, is looking to diversify into businesses like mutual funds, insurance, e-commerce and retail. It recently secured a payments bank license.

In March last year, Paytm scooped up US$1.4 billion from SoftBank in one of the largest fundraises by an Indian digital startup, valuing the entity at US$7 billion. In January 2018, Paytm completed a secondary share sale which valued the firm at close to US$10 billion.

According to the Economic Times, Berkshire could pick up stake in Paytm's parent through a primary subscription of shares. 

"Berkshire Hathaway is impressed by the scale that Paytm has been able to build in a short period of time," the paper cited a source as saying.

Buffett launched Berkshire India in 2011 in partnership with Bajaj Allianz General to sell insurance products in the country, but exited two years later supposedly due to "excessive regulation," CNN noted in a previous report.