Buffett & # 39; s Berkshire Hathaway has a penchant for financial services.
Berkshire Hathaway Inc. bought an interest in the company behind Paytm, India & # 39; s largest brand for digital payments, in the first attempt of the conglomerate to become startups of the country.
Berkshire plans to acquire 3 percent to 4 percent of One97 in a deal valued at more than $ 10 billion, people said, and they did not ask to be identified because the discussions are private. Warren Buffett, chief executive officer of Berkshire, was not directly involved in the investment in One97 Communications Ltd., his assistant, Debbie Bosanek, said Monday in an e-mail. Bosanek declined to comment on the size of the investment.
One97, founded by billionaire Vijay Shekhar Sharma, runs the Paytm brand and is the leading player in India's fast-growing digital payment market. Berkshire joins a high-profile group that invests in Sharma's companies, including the SoftBank Group Corp of Masayoshi Son and Alibaba Group Holding Ltd. and Ant Financial from Jack Ma.
"It is a paradigm shift," says Dinesh Arora, a PricewaterhouseCoopers LLP partner in India. "Financial services reach only the top 10 to 20 percent of India, but technology has the potential to add a large proportion of India & # 39; s 1.3 billion people and bring savings, credit and investments to their smartphones . "
One97 declined to comment. Mint reported on a deal earlier on Monday.
Sharma was given a huge boost in 2016 after the Indian government put most of the nation's paper money into circulation in an effort to prevent corruption. His starting startup, a pioneer in the country's burgeoning field, saw tens of millions of consumers and hundreds of thousands of companies sign up for digital services within a few months.
"At night we went from a new thing to a must-have," Sharma said in a profile from 2016.
He has ridden that momentum in the technological field of India. According to reports, India's digital payments sector will reach $ 1 trillion by 2023, now about $ 200 billion, according to Credit Suisse Group AG.
One97 owns 49 percent of Paytm Payments Bank, which leads India's digital payments market. Online retailer Paytm Ecommerce Pvt, also founded by Sharma, shares the brand name with One97 and manages the online retail platform Paytm Mall and sells everything from smartphones to fashion.
Buffett, who turned 88 this week, focused on value investing for a long time and was frightened away from technology companies because of what he joked about his own "intellectual deficiencies" in understanding the field. But he has adapted and accumulated in newer holdings such as Apple Inc. in recent years. He considered an investment in Uber earlier this year.
Buffett & # 39; s Berkshire Hathaway has a penchant for financial services and in August he revealed his interest in Goldman Sachs Group Inc. had increased. He also made significant investments in American Express Co., Wells Fargo & Co. and Bank of America Corp.
"Fintech is exhilarating because it drastically lowers customer service costs, connects people, even in the most remote parts of India, and offers them the same level of customer service as someone who is in Mumbai," Arora said.
The investment in Berkshire is because some critics wonder whether India's start-up scene has become overheated, with several recent billions of investments increasing the value of such companies.
(With the exception of the headline, this story is not edited by NDTV staff and is published from a syndicated feed.)