Berkshire Hathaway confirms investment in Paytm parent One97 Communications
This investment is expected to help Paytm strengthen its market leadership against Flipkart-owned PhonePe and Google’s Tez besides potential competition from Facebook-owned WhatsApp and Reliance Jio.
Berkshire Hathaway has confirmed that it has made an investment in Paytm parent One97 Communications, its first investment in an Indian company.
“A number of people have inquired about whether Berkshire had made an investment in One97 Communications Ltd., the parent company of Paytm. This is to confirm that the investment was made and that it was not a transaction in which Mr. Buffett was involved” said Debbie Bosanek, assistant to Warren Buffett, Chairman and CEO of Berkshire Hathaway
Earlier today, ET had reported that Berkshire Hathaway is in talks to invest about Rs 2,000-2,500 crore in One97 Communications, that could value the company at $10 billion. One97 Communications already counts China’s Alibaba Group Holdings and Japan’s Softbank among its major investors.
Berkshire did not share the details of the transaction.
ET had also reported that the investment is being led by Todd Combs, one of the fund managers at Berkshire who is a contender for the CIO position at the firm.
“Berkshire is in talks to pick up a 3-4% stake in the company and it is being done through a primary subscription of shares,” a source familiar with the development had told ET.
Paytm was earlier valued at around $7 billion last year when it raised $1 billion from Softbank Vision Fund and around $10 billion earlier this year during a secondary share sale by employees of the company.
This investment is expected to help Paytm strengthen its market leadership against Flipkart-owned PhonePe and Google’s Tez besides potential competition from Facebook-owned WhatsApp and Reliance Jio.
The development comes as Paytm has been diversifying its business across financial services and offline payments after acquiring customers through services such as mobile recharges, rail and air bookings, movie ticketing and utility bill payments.
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Economic Times (India)
August 27, 2018, 21:54 IST
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