Warren Buffett’s Berkshire Hathaway Inc is all set to buy a small stake in One97 Communications Ltd, it’s the parent of Paytm making it the billionaire investor’s first investment in an Indian company, according to two people aware of the development. India’s largest payment services provider Paytm is in talks with the Berkshire Hathaway since February for raising nearly $ 300 to 350 million during the valuation of about 10 to 12 billion.
The deal is likely to be announced in the next two weeks and it would be the first investment of Berkshire Hathaway in India’s buzzing startup ecosystem. It will also be the company’s first investment in a privately-held technology company in the world. Previously, Berkshire Hathaway has also invested in some publicly listed tech companies namely International Business Machines (IBM) Corp and Apple Berkshire.
In the month of May, many other publications reported that Berkshire Hathaway has tried investing in ride hailing firm Uber, but the talks were not successful. Buffett is also known as the Oracle of Omaha and did set up the Berkshire India in the year 2011 and also partnered with the Bajaj Allianz for selling the insurance. However, Berkshire also exited the partnership citing the aggressive regulation.
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Berkshire Hathaway’s entry in India has been long awaited and the imminent deal would mark a ringing endorsement of India’s internet and tech ecosystem from one of the world’s most renowned investors. Paytm also has a strong capital table with the bunch of globally renowned investor like Japan’s SoftBank Group, Alibaba Group from China and the Ant Financial. It also counts SAIF Partners and MediaTek as the investors.
Paytm claims of having touched $4 billion in the monthly gross transaction value along with the number of transaction by touching a peak of 1.3 billion in the quarter ended in the month of June. Vijya Shekhar Sharma has founded the company in the year 2000, One97 also started out as the mobile payments and the mobile recharge business and currently ranks among the top three consumer internet companies in the country.
Paytm’s payments business has also seen tremendous growth since the Indian government invalidated high-value currency notes in November 2016. Sharma was one of the 11 recipients of the Reserve Bank of India’s payments bank licences and runs Paytm Payments Bank.
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