Berkshire Hathway has confirmed the investment in Paytm‘s parent firm One97 Communications. The Indian industry was abuzz with the news of Warren Buffett entering the Indian market, while the investment by Berkshire Hathway is confirmed, Warren Buffett was not involved in the transaction.
“A number of people have inquired about whether Berkshire had made an investment in One97 Communications, the parent company of Paytm. This is to confirm 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 of Berkshire Hathaway.
The investment is speculated to be led by Todd Combs, one of the fund managers at Berkshire, who is a contender for the CIO position at the firm.
The fresh investment is expected to propel the Indian digital payments giant past the valuation of $10 billion. The investment is speculated to be worth around ₹2,000 to ₹2,500 crores.
Last year, Alibaba-backed Paytm was valued at $7 billion, when it raised $1 billion from Softbank Vision Fund. Its valuation further increased to $10 billion, earlier this year, during the sale of secondary shares by the employees.
The funds raised are expected to help Paytm strengthen its position in the Indian market against rising competition from the Flipkart-owned PhonePe, along with Google‘s Tez.
Last month, PhonePe had claimed the top spot in UPI transactions, edging past Paytm.
Paytm has been exploring new markets, as it partnered with Softbank and Yahoo Japan’s joint venture PayPay, to expand to Japan.
Earlier this month, Paytm acquired a wealth management startup Balance, to expand its product offering.
Paytm’s new partner Berkshire Hathway had tried to penetrate the Indian market as a corporate agent of Bajaj Allianz in 2011. The company had to exit the Indian market due to the strict laws constraining ownership by foreign companies and lack of profitability.
With its first direct investment in India, Berkshire is again looking to establish its presence in the country. It is yet to be seen, how this investment turns out for Berkshire.