Berkshire Hathaway Invests Near $600 Million into India’s Paytm and Brazil’s StoneCo Fintech Payment Firms
Berkshire Hathaway is known as being a multinational holding company that is run by Warren Buffett as CEO and chairman. Two recent investments they made were big enough to reach the Wall Street Journal, accounting for approximately $600 million towards two fintech payment first.
The investments seem to have been pursued by Todd Combs, one of the two portfolio managers for Berkshire. The first of the investments, which happened in August, appears to be for a $300 million stake in Paytm, which is the largest mobile-payment service in India. The second investment, which was made in the last week, was to establish an unlisted number of shares through an initial public offering with StoneCo, which is the fourth-largest payment processor in Brazil by volume.
Making investments like these are slightly off the typical path that Berkshire usually takes, considering the $711.932 billion that they handle in assets, as of 2018. Their better-known investments include blue-chip firms, like Coca-Cola. They also have acquired multiple insurance companies and utilities firms. In terms of technology investments, Buffett had held on to the sentiment that technology has not been his “circle of competence.”
Combs, along with the second portfolio manager Ted Weschler, have been working to broaden the scope of the company’s investments. Both StoneCo and Paytm have proven themselves as established companies that have a strong stance in their respective industries and local markets.
The Wall Street Journal has noted that the fact of Warren Buffet’s investment firm investing in fintech companies is a sign that the industry is maturing. In fact, the fintech industry managed to bring in $35 billion in venture capital for the first three-quarters of 2018.
Still, no one can forget Buffett’s stance on Bitcoin, called it “rat poison-squared,” with his accusation ringing out through both the crypto and fintech world. He has continually held the opinion that Bitcoin does not count as currency and it is a foolish way to invest. In fact, about a year ago, he predicted that Bitcoin’s new “bubble territory” indicated that it would soon “implode.”
The demonetization policy in India created a much different perspective, as the economic struggles lead consumers to turn to cryptocurrency for support in 2016. The popularity of this market continued to grow into 2017, which the government met with an anti-crypto crackdown from RBI in April this year. Since then, there have been many petitions for change, both publicly and by the industry. The ban has remained, but the government plans to solidify their position officially in November this year.
Brazil has been welcoming to cryptocurrency, as the largest brokerage in the country put out a statement this month that it plans to launch a cryptocurrency exchange with Bitcoin and Ethereum. The reason they gave for getting involved was largely due to the popularity and demand from local investors to do so.