Marking the billionaire’s first investment in an Indian company, Berkshire Hathaway Inc. is in talks to buy a small stake in the parent company of Paytm, One97 Communications. Citing on the condition of anonymity, two people aware of the deal revealed that India’s largest payment service provider has been trying to seal the deal with Warren Buffet’s Berkshire Hathaway Inc. since February to procure around ₹ 2,200- 2,500 crore ($300-350 million) at an estimation of around $10-12 billion.
However, both Paytm, as well as Berkshire Hathaway’s spokesperson, choose to not comment further on the news.
Berkshire Hathaway has previously invested selectively in some tech companies that are publicly listed, remarkably Apple and International Business Machines (IBM) Corp. Although Berkshire has recently withdrawn from IBM, it still continues to hold Apple’s shares. The deal that is likely to officially announced in the upcoming two weeks, will mark Berkshire Hathaway’s first financing in the nation ’s growing investiture ecosystem. The deal will also mark the company’s first venture in investing in a private tech company in the world.
Speculations were made in May that Berkshire Hathaway tried to strike a deal with ride-hailing firm Uber, but the attempts proved to be futile.
Known as the Oracle of Omaha, Warren Buffet established Berkshire India in 2011 in association with Bajaj Allianz to sell indemnification policies. Citing excessive regulation, Berkshire called it quits two years later.
Berkshire Hathaway’s long-awaited entry in the Indian market and the forthcoming deal would represent India’s tech and internet network in a totally different light marking ringing endorsement from one of the most prominent investors of the world, particularly in the time when country’s startup network has received quite a flak for its unsustainable financials and frothy valuations over the past five to six years.
Paytm by this time holds a strong capital table with a handful of globally recognized investors such as Ant Financial, China’s Alibaba Group, and Japan’s SoftBank Group. The company also recognizes MediaTek and SAIF Partners as investors.
As per a leading media firm, Paytm asserts to have touched $4 billion in its monthly gross transaction value, while a number of transactions touching a zenith of 1.3 billion in the quarterly end of June.
Established by Vijay Shekhar Sharma in 2000, One97 started its journey as a mobile recharge and mobile payment platform and at present is categorized as one of the top three consumer internet companies in the country. The company has created a rout of payment solutions which enables consumers to transact through Paytm Payments Bank and Paytm digital wallet.
In the past two years, Paytm has further expanded its e-commerce business by retailing apparel, smartphones, movie tickets, consumer goods, footwear, and bus tickets.
The e-commerce marketplace giant Paytm Mall is endeavoring to touch annualized overall sales of $10 billion by March 2019, crowning it with the title of 3rd strong contender within a year of its launch in the e-commerce market.
The company’s business has also seen a vast growth after the demonetization of the Indian economy in November 2016. Mr. Sharma runs Paytm Payments Bank and was one of the 11 beneficiaries of the Reserve Bank of India’s payments bank licenses.