Warren Buffett's Next Investment Will Be a First for Berkshire Hathaway

The Paytm stake purchase will mark Berkshire Hathaway boss Warren Buffett’s first investment in an Indian company

The Paytm stake purchase will mark Berkshire Hathaway boss Warren Buffett’s first investment in an Indian company

Last month, PayTM conducted 5 billion transactions worth $50 billion in gross transaction value (GTV) on an annualised basis based on its performance in June.

Berkshire Hathaway Inc. has agreed to buy a stake in the company behind Paytm, India's biggest digital payments brand, in Warren Buffett's first foray into the country's startups, people familiar with the matter said.

Digital payments are a burgeoning space in India and Buffett is looking to get in as the market heats up, despite the fact that Paytm is still generating losses.

India's digital payments segment is forecast to reach $1 trillion by 2023, from about $200 billion now, according to Credit Suisse Group AG.

Warren Buffett may soon make his first direct investment in an Indian company.

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Berkshire Hathaway had in 2011 set up Berkshire India to partner with Bajaj Allianz to sell insurance, but exited the partnership two years ago. He did, however maintain, as per an interview with ET Now past year, that the country had "tremendous potential", and explained he would be open to making an investment in the right company.

In May, Paytm's parent, One97 Communication announced that its revenue grew to Rs 829 crore for the financial year 2017, up from Rs 598 crore in the year before, even as its losses narrowed for the same period. Till date, Paytm has raised about $2 billion in funding.

Paytm, India's largest payment services provider, has been in talks with Berkshire Hathaway since early February to raise about ₹ 2,200- 2,500 crore ($300-350 million) at a valuation of about $10-12 billion, the two people cited above said on condition of anonymity. More importantly, it will also mark Warren Buffett's first investment in a private technology company.

Japan's SoftBank and China's Alibaba Group are among the major backers of Paytm.

The company has invested in public-listed technology companies before, including IBM and Apple.

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