Vijay Shekhar Sharma, Founder, Paytm
The list of marquee investors in Paytm, owned by Vijay Shekhar Sharma
-founded One97 Communications, includes Jack Ma-led Alibaba and Masayoshi Son-led SoftBank.
Now, it has added Warren Buffet’s Berkshire Hathaway
to the list. The US-based company invested $365 million in Paytm, valuing it at $12 billion. Sharma tells Karan Choudhury
that this will help his company become truly global. Edited excerpts:
When did the talks start?
I spoke to Todd Combs, investment manager of Berkshire Hathaway, in February where we had a freewheeling two-hour-long conversation about India, technology, investments. We then shared our company details and annual reports. Later, he called us. That is when things picked up.
Are you planning to enter the US market now?
It is primarily about India investments, building a payments ecosystem here. This changes the perspective and we can now call ourselves a global company. Till now, we had Asian investors, now we have a global one. We will probably have the chance to see the point of view of American investors.
You have SoftBank and Alibaba already on board. Now you will have an investor from a Warren Buffet-led company. Do you fear a clash of ideas?
Actually, I think they all share the same idea of how to run a company. First build a large consumer business, take a large market share, and build a free cash flow.
Is Berkshire planning to increase the stake in the future?
We will get to know it. Right now, it is an investment that has been taken and that is what it is. The next round comes much later. This investment and the cash we already have in the bank give us a head-start for the next three years.
Will you bring in anymore strategic investors?
We have the best investors in the world. We do not need new strategic investors. It completes the cycle of having the best of Asia and the US.
What is your expansion plan like?
Expanding customer base — demand side and supply side. We will launch Paytm
Money soon for mutual funds; we will then expand into other services once we have a large customer base.
When will you break even and start making profits?
I think it will take at least two to three years for sure. We are not chasing profits but scale. That is why we would need that much of time. At a group level we are doing about $50 billion in gross merchandise value (GMV). We want to double it to $100 billion by next year.
Globally you have operations in Canada and Japan. Are you planning to enter other markets?
No, we are not planning to expand to other markets. We are concentrating on the India opportunity. In Japan, we are providing technical knowhow. We will expand in Japan the same way will did in India.