According to the media, Berkshire Hathaway is considering an investment of between 20 billion and 25 billion rupees ($286 million to $357 million) in One97 Communications — Paytm’s parent firm. That would give Berkshire a 3-4 percent stake in One97. If it goes through, the deal will be done via a primary subscription of shares, according to two sources familiar with the deal, and would be Buffet’s first deal in India.
The news has been reported separately by both the Economic Times and Mint, an Indian financial daily newspaper.
The deal would push Paytm’s valuation over $10 billion, according to the ET. Todd Combs, one of Berkshire’s top fund managers, is reportedly leading the transaction. Combs is reportedly seen as a potential chief investment officer at the firm.
Paytm has already pulled together an impressive stable of investors. The firm is backed by Japanese mega-investor Softbank and Chinese eCommerce giants Alibaba and Alibaba’s almost-equally massive financial arm Ant Financial. Two years ago, Paytm said it saw a sizable growth in traffic when India unexpectedly demonetized and pulled 86 percent of its cash from circulation, leading to a massive cash crunch.
That allowed digital payment firms to provide an alternative mode of payment to India’s consumers.
But India’s digital payments market has also become an increasingly crowded and attractive place for global players of all stripes. Facebook’s WhatsApp has been actively pushing for an expansion into the India digital payments market and had been hoping to enter the market by the beginning of this summer by offering payments through its massive popular chat application. But it has since run into regulatory hurdles in-nation — hurdles that it is still waiting to clear.
And beyond the digital payment race, cash is also an active competitor in the market — and one that has been hard to shake, demonetization project or not.