cofounder and CEO Binny Bansal shake hands at an event to reveal the U.S. retail giant’s $16 billion acquisition.( Photo: AFP/Getty Images)Berkshire Hathaway’s financial investment in Paytm is significant not just for the capital, however for tactical reasons,
too. Aside from being a formidable player in India’s fintech sector, Paytm has actually been broadening into other areas as well that range from e-wallets and electronic banking to shopping, messaging and cloud-based information storage.Many investors and start-ups think that original services and products, like Paytm, will continue to bring in more capital, particularly from overseas investors seeking new and intriguing business designs. India’s ShopX, a B2B e-commerce platform, just recently closed an investment of million from Hong Kong’s Fung Strategic Holdings, the personal investment arm of Hong Kong’s Victor and William Fung. The billionaire bros are leaders in supply chain management for retail and customer products, with operations in more than 40 countries.
“Our financial investment in ShopX is not simply financial, but strategic as well,” says Rajesh Ranavat, executive director of Fung Strategic Holdings. “The investment in ShopX was a chance for us to get in the Indian market, explore all chances linked to the future of retail, and look at how transformative concepts, like ShopX’s current distribution platform, can be used to broaden to other markets in Asia that are similar to India”
A growing breed of Indian business owners believe that it’s necessary to attract financiers who can raise their companies to the next level with not only capital but understanding and a long-lasting vision. ShopX cofounder Amit Sharma recalls the time he made a list of 3 individuals in India who he wished to have as financiers. One of them was Infosys cofounder Nandan Nilekani, who ultimately signed up with ShopX by making an $18 million investment in the business.
“Initial business models like Paytm and ShopX make for compelling financial investments because of their scale potential and competitive moats, and this becomes part of a bigger pattern today,” states Sharma. “Global capital, if structured smartly, can be a lorry to make Indian brand names improve their global reach. Berkshire Hathaway’s financial investment in Paytm signals an action ahead in India’s startup story.”