Berkshire Hathaway exited Paytm parent company One97 Communications on Friday with a loss of around 40% on the high-profile investment it made more than five years ago.
The firm Warren Buffett invested around $260 million in Paytm in 2018, acquiring a 3% stake in the financial services startup with a valuation of around $10 billion.
The investment giant, which sold a stake worth $36 million in Paytm in 2021 at a profit, sold its remaining position on Friday for $121.6 million, according to data from the local Indian stock exchange. Berkshire earned a return of less than $160 million on its ~$260 million investment in Paytm.
Paytm was Berkshire Hathaway’s first direct seed investment in India, and the deal was widely celebrated by the local startup ecosystem. Alibaba, SoftBank and T Rowe Price were among other investors in Paytm.
But while Paytm, which allows users to make digital mobile transactions as well as access loans and invest in mutual funds, made its initial public offering at a valuation of over $20 billion, it later fell dramatically.
Shares of Paytm, which made its IPO debut in 2021 at $25.8 each, fell to as low as $5.58 a year ago. The Indian company has since recovered and closed on Friday at $10.73 apiece following rapid revenue growth and improving financials in recent quarters.
Paytm revealed last month that its Q2-24 revenue growth was strong at 32% YoY, up from 39% YoY last quarter (moderation due to timing of online festive sales). Payments remained strong while loan growth remained high, but personal loan growth moderated. Profitability improved; which represents a quarter more adjusted EBITDA profit.
