- Alibaba cofounder Jack Ma’s Ant Group is gearing up for a record $34 billion IPO.
- Ant owns stakes in two financial-technology companies that also count Warren Buffett’s Berkshire Hathaway as an investor.
- Berkshire and Ant both invested in Brazilian e-commerce group StoneCo when it went public in October 2018.
- Buffett’s company also bet on the owner of Paytm in August 2018, and Ant owns 30% of the Indian digital-payments specialist’s parent company.
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Warren Buffett may be looking forward to Ant Group’s public debut in the coming weeks, as it promises to pull some of Berkshire Hathaway’s lesser-known investments into the spotlight.
Alibaba cofounder Jack Ma spun off Ant from the Chinese e-commerce giant in 2011, but still owns 8.8% of the affiliate. Ant owns Alipay, China’s leading online-payments platform. It is seeking to raise more than $34 billion via a dual listing in Hong Kong and Shanghai, setting the stage for the biggest initial public offering in history.
At first glance, Buffett’s sprawling conglomerate — which owns scores of businesses such as See’s Candies, Geico, and the BNSF railway as well as billion-dollar stakes in Apple, Bank of America, and Coca-Cola — appears to have little in common with Ant, a financial-technology titan.
However, Berkshire and Ant are both investors in two fintechs, StoneCo in Brazil and Paytm in India.
Buffett's company spent about $340 million on StoneCo's shares when it went public in October 2018, giving it a roughly 11% stake in the e-commerce specialist. Ant snapped up $100 million worth of stock at the same time.
Berkshire also plowed around $360 million into One97 Communications, Paytm's parent company, in August 2018, CNNMoney reported at the time. Ant owns more than 30% of One97, according to its IPO filing, making it a key investor in Paytm, which was valued at $16 billion last November.
Buffett famously sticks to businesses he understands and has avoided investing in tech companies and IPOs for most of his career, so it's no surprise that he wasn't behind the StoneCo and Paytm bets. Todd Combs, the CEO of Geico and one of Buffett's two portfolio managers, made those wagers.
Combs also struck the deal for Berkshire to invest $735 million in Snowflake when the cloud-data platform went public in September.
Ant's mammoth IPO is set to shine a light on its StoneCo and Paytm stakes, and Berkshire's bets on those companies in the process. Given Combs' taste for fintech bets, the two companies may well cross paths again.