Global conglomerate Berkshire Hathaway has reportedly bought a stake in Paytm - India’s largest payment services provider.
Sources told Indian financial newspaper Mint that the Warren Buffett-led conglomerate had been in talks since early February over a US$360 million investment, which would value One97 Communications at around US$10 billion to US$12 billion.
A Berkshire Hathaway spokesperson confirmed to Mint that “the investment was made and that it was not a transaction in which Mr. Buffett was involved.”
According to CNN, the move marks Berkshire’s first investment in an Indian company - however, this is not the first time it has set up shop in the country. Berkshire set up operations there in 2011 and partnered with Bajaj Allianz to sell insurance – but the conglomerate left the partnership reportedly because of too much red tape, according to CNN.
Paytm has already received backing from China’s Alibaba Group and Japan’s SoftBank, The Economic Times said. In a report earlier this week, a source told the newspaper that Berkshire Hathaway is impressed by the scale that Paytm has been able to build in a short period of time.
“They realise that technology companies go through a cycle of losses before they start generating cash,” it was quoted as saying.