At first blush, Berkshire Hathaway's recent early-stage fintech investments may seem out of place. But they do fit with Warren Buffett's longtime strategy of making multiple bets across an entire industry.
Buffett's conglomerate, which typically takes stakes in blue chip American companies, recently invested about $600 million in two fintech companies focused on emerging markets — Paytm and StoneCo, The Wall Street Journal reported Monday. Both investments were led by one of Berkshire's two top money managers, Todd Combs.
While it's rare for Berkshire to invest in tech start-ups, it's not so rare for the holding company to make seemingly competing investments in one industry. Berkshire owns banks Wells Fargo, Bank of America (its largest overall holding) and Goldman Sachs, as well as major stakes in four domestic airlines.
Berkshire's newest industry bet appears to be on payments. In addition to the start-ups revealed this week, Berkshire Hathaway has a significant stake in the three largest U.S. incumbents — Visa, Mastercard and American Express.
Like the U.S. payment giants, Paytm and StoneCo dominate their respective marketplaces. Berkshire took a $300 million stake in August in Paytm, India's largest mobile-payments service that claims to have more users than PayPal, according to the Wall Street Journal. Berkshire bought shares in Brazilian payment processor StoneCo when it went public last week.