The Wall Street Journal reports that Berkshire Hathaway has invested $600m in 2 big fintech companies focusing on emerging markets: StoneCo, a Brazilian payments service, and One97 Communications, the parent company of Indian mobile payments company Paytm.
Why is this a big deal?
Because ‘emerging’ and Berkshire go together like oil and water
Berkshire’s bread-and-butter is US-based companies with century-long records of stable growth like Coca-Cola, or utilities companies.
Buffett has also spoken out against investing in IPOs compared with market-tested companies.
But, Buffett himself has admitted that Berkshire’s been hoarding way more cash (to the tune of $111B) than it’s been investing…
And now Todd ‘Diddy’ Combs is pimpin’ all over the world
(OK, we’re the only ones who call him that.)
Combs invested nearly $300m in Stone’s IPO last week and around $300m in Paytm in August. And, as one of BH’s 2 portfolio managers, Combs and his partner in crime Ted Weschler have been expanding the company’s horizons.
However, WSJ points out both Paytm and Stone share qualities of a typical Berkshire investment, including dominating their respective markets: Stone is the 4th-largest payment processor in Brazil by volume and Paytm has more users than Paypal has globally.