Legendary investor Warren Buffett is likely to buy stake in One97 Communications Ltd, the parent firm of homegrown digital payments firm Paytm, according to reports.
The Vijay Shekhar Sharma-led Paytm has been in talks with Buffet for a few months now and the deal is likely to close shortly. One97 Communications will raise an amount of about $300-350 million dollars as part of the transaction, BloombergQuint quoted a source as saying.
According to a Mint report, the deal has been struck at a valuation of $10-12 billion.
Started by Sharma in 2010, Paytm has become a leading digital payments and e-commerce firm in India. It recently got a payments bank licence and has started operations. Its key investors include Softbank, SAIF Partners, Alibaba Group and Ant Financial. Recently Paytm has innovated with selling investment products like gold and mutual funds through their network, the reports said.
The deal, if concluded, will be the first transaction by Warren Buffett in the Indian start-up universe, the reports highlighted.
One97, which was last valued at $7 billion, according to Bloomberg after it raised $1.4 billion from SoftBank Group Corp in May, started as a mobile payments and recharge business in 2010. The company has since then created a host of payment solutions such as Paytm’s digital wallet and Paytm Payments Bank, and is now looking to diversify into the mutual fund and insurance space through Paytm Money Ltd. Paytm wallet has nearly 300 million users, the reports highlighted.
In past one year, Paytm has also built a separate e-commerce marketplace Paytm Mall. Earlier this month, it said it is targeting $10 billion in annualized gross sales by March 2019 on its e-commerce platform, it was pointed out.