It’s official: Warren Buffett’s Berkshire buys stake in India’s Paytm

Signage for digital-payments provider Paytm, operated by One97 Communications Ltd., is displayed at a shop selling printer cartridges in Mumbai, India, on Friday, Jan. 27, 2017. Photographer: Dhiraj Singh/Bloomberg

India’s largest digtial payment services provider Paytm, owned by One97 Communications Ltd, said today that the fintech startup has raised an undisclosed amount from Warren Buffett-owned Berkshire Hathaway Inc. Berkshire’s investment manager Todd Combs, who was leading the investment discussions with Paytm, will be joining the board of One97 Communications.

Mint was first to report on Monday that Buffett’s Berkshire Hathaway Inc. is set to buy a 3-4% stake for ₹ 2,200-2,500 crore in One97, making it the billionaire investor’s first investment in an Indian company. The current round pegs Paytm’s valuation at about $10-$12 billion.

The Omaha, Nebraska-based Berkshire has steered away from making any investments in India till now. This is not just Berkshire’s first investment in the country’s buzzing startup ecosystem; it is also the company’s first investment in a privately-held technology company in the world.

“I have been impressed by Paytm and am excited about being a part of its growth story, as it looks to transform payments and financial services in India,” said Combs.

While Berkshire Hathaway’s long term investment strategy in India remains still unclear, this deal marks a ringing endorsement of Paytm and India’s internet and tech ecosystem.

“We feel both excited and humbled by this endorsement. Berkshire’s experience in financial services, and long-term investment horizon, is going to be a huge advantage in Paytm’s journey of bringing 500 million Indians to the mainstream economy through financial inclusion It is my honour to welcome Todd to our board, where he will bring his wealth of experience to guide our management team,” said Paytm’s founder and CEO Vijay Shekhar Sharma.

Berkshire Hathaway joins a strong list of globally renowned investors, who have parked their money in Paytm. Some of the names include Japan’s SoftBank Group, China’s Alibaba Group and Ant Financial. It also counts SAIF Partners and MediaTek as investors.

The news comes in at a time when India has turned into a battleground for winning the digital payments war. Over the past year, Paytm’s near-monopoly status in digital payments has been challenged by numerous players such as Google Pay, Amazon Pay, BHIM and Flipkart-owned PhonePe, while newer players such as Whatsapp’s payments service are also expected to mount a significant challenge.

With this news, Paytm has effectively separated itself from the rest of the pack.

Paytm claims to have touched $4 billion in monthly gross transaction value, with the number of transactions touching a peak of 1.3 billion in the quarter ended June, Mint had reported in July.

Founded by Sharma in 2000, One97 started out as a mobile payments and mobile recharge business and currently ranks among the top three consumer internet companies in the country. The company has created a host of payment solutions where consumers can transact via the Paytm digital wallet and Paytm Payments Bank.

In the last two years, Paytm has also aggressively built its e-commerce marketplace by selling consumer goods, apparel, footwear, smartphones, bus tickets and movie tickets.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.