Berkshire Hathaway has been investing in FinTech since early 2018. The investment company is owned by Warren Buffett, a top investor and influencer. Therefore, their moves in FinTech may signal a market shift in that direction. They’ve already invested hundreds of millions of dollars in just a few months. According to The Wall Street Journal, Berkshire Hathaway has invested approximately $600 million in StoneCo. This is a payment processing company from Brazil. They have also invested heavily in the parent company of Paytm, the largest payment processing company out of India.
The WSJ reports that Todd Combs and Ted Weschler, portfolio managers at Berkshire Hathaway led the FinTech investment strategy. This is uncommon for the company that safely invests in solid U.S. blue-chip companies like Coca-Cola. Their holdings also include insurance companies and utilities. Warren Buffet claims to lack experience in the technology sector. Consequently, the company has steered clear of FinTech, until now.
Todd and Ted bring additional expertise to the table. They’re broadening the perspective of Berkshire and broadening the opportunities where they would look to invest.David Kass, professor at the University of Maryland’s Robert H. Smith School of Business
Berkshire bullishly acquired a $300 million stake in Paytm in August 2018. They also captured shares of Stone via its initial public offering (IPO). Both companies are said to carry a great deal of marketshare in their local economies. Stone is among the top payment processors in Brazil by volume, while Paytm has more users than PayPal Holdings. They also operate in regulated industries, making them relatively safe bets for the investment giant.
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