Berkshire Hathaway confirms investment in Paytm parent One97 Communications


American multinational conglomerate Berkshire Hathaway confirmed it has invested in Paytm’s parent company One97 Communications Ltd, according to several media reports. The company also said billionaire Warren Buffet, who runs the conglomerate, was not personally involved in the transaction, according to a Reuters report.

This marks Berkshire Hathaway’s first investment in an Indian technology firm.

(L to R): Vijay Shekhar Sharma, Founder & CEO, Paytm, with Todd Combs, investment manager at Berkshire Hathaway

Earlier today, media reports spoke about a likely investment.

There, however, isn’t much clarity on the size of the investment or the stake acquired by the American company. A Mint report said Paytm had been in talks with Berkshire Hathaway since early February to raise about Rs 2,200- 2,500 crore ($300 million - $350 million) at a valuation of about $10 billion-$12 billion.

On the other hand, The Economic Times said the stake to be picked by Berkshire Hathaway could be close to 3-4 percent. Alibaba and ANT Financial are majority shareholders in the Noida-based entity. In May last year, the company had announced it had raised $1.4 billion from Softbank Group Corp for a 20 percent stake.

Paytm on Tuesday also confirmed this development, stating that Todd Combs, investment manager at Berkshire Hathaway, has joined the company's board of directors.

Speaking on the investment, Paytm Founder and CEO, Vijay Shekhar Sharma said,

“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."
While Todd Combs, Investment Manager, Berkshire Hathaway added,
"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.”

Over the past month, Paytm has been rapidly expanding its offerings. This month, it announced its foray into the SaaS services space, launching Paytm AI Cloud for India in partnership with investor Alibaba. It had also invested $16 million in its mobile entertainment joint venture Gamepind, which was started in January this year along with AG Tech.

Apart from SaaS and mobile entertainment, Paytm set up general and life insurance subsidiaries, and is piloting lending operations. In the coming months, the company is also looking to launch its wealth management subsidiary - Paytm Money. Last month, Paytm had said it had achieved an annual run rate of 5 billion transactions and $50 billion in GTV (Gross Transaction Value). It had also said that 50 percent of these transactions were fuelled by users in Tier II and Tier III cities.

(The article has been updated with Paytm's inputs).