Berkshire Hathaway invests in Indian mobile payments biz, Paytm

Berkshire Hathaway just invested in a privately held tech company for the first time ever, with India’s largest mobile-payment firm Paytm.

August 28, 2018

On Monday, Warren Buffett’s Berkshire Hathaway invested in One97 Communications Ltd., the parent company of India-based mobile payments firm Paytm.

As of Tuesday morning, the size of the firm’s investment was not confirmed — but The Wall Street Journal reports an estimate of $285m to $357m.

If you don’t know, now you know

Paytm is India’s largest mobile payments firm, and their popular app is used to pay for everything under the South Asian sun, from movies to meals.

The company, whose popularity skyrocketed during the great Indian-cash ban of 2016, says it now has more than 300m users — this in a country that collectively has around 390m total internet users (the second largest internet market, by volume, behind China).

This is BH’s maiden investment into privately held tech companies

According to The Economic Times, Berkshire wouldn’t have been caught dead investing even in listed tech companies until a few years ago, let alone a privately held tech firm that is not yet profitable and likely to continue hemorrhaging cash for a while.

But as consultancy firm Bain & Co. reports, global tech titans are all chomping at the bit to squeeze into India’s booming internet economy — and not even Berkshire is too good to shy away.

The investment sent Paytm’s value soaring

An investment of 20B to 25B rupees gives Berkshire a 3% to 4% stake in Paytm’s parent, and gives Paytm a valuation of more than $10B, up from over $7B last year (when it raised $1.4B from Softbank).

Also, let the record show, this was not a Warren Buffett-led deal: Todd Combs, one of Berkshire’s key fund managers, was the one who reeled in this tech-whale.

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