Asian Merchant Commerce Platform Pine Labs Acquires Additional Funding, Now Valued at $3B

Mastercard-backed Pine Labs, an Indian merchant commerce service provider, has finalized the first close of $285 million in funding at a $3 billion valuation.

Pine Labs provides payment terminals, invoicing tools, and working capital to over 150,000 merchants in the Middle East and other regions in Asia. In January 2021, the company began offering Buy Now, Pay Later or BNPL services in Malaysian markets. Last month, Pine Labs acquired Southeast Asian equivalent Fave for $45 million.

Investors in Pine Labs’ most recent investment round reportedly include Baron Capital Group, Duro Capital, Marshall Wace, Moore Strategic Ventures, and Ward Ferry Management.

Existing investors Temasek, Lone Pine Capital, and Sunley House Capital also made contributions to the Fintech firm’s latest round.

Pine Labs, which is backed by PayPal, has seen its valuation surge by around 3x from $1 billion (last year) to $2 billion toward the end of 2020.

B. Amrish Rau, CEO at Pine Labs, stated:

“This is an exciting phase in our journey as we enter newer markets. We excel in enterprise merchant payments and now want to scale new frontiers in the online space as well, at the same time continue to power the credit and commerce needs of our offline merchant partners.”

In 2020, Pine Labs had acquired funding from Mastercard. After securing the funds, the company had become the third most valuable Fintech in India, right after Paytm (as of December 2020), which had been valued at roughly $16 billion, and PhonePe, which was last valued at $5.5 billion.

Pine Labs’ $75-100 million investment round in December 2020 reportedly included a secondary share sale through which some of the firm’s early backers and workers have sold off their holdings.

Pine Labs, which provides point of sale (PoS) machines to merchants so they can take digital payments, has been quite focused on its Buy Now, Pay Later products for retail clients. The company’s CEO Amrish Rau had revealed last year that Pine Labs is handling yearly installment payment volumes of around $3 billion (determined based on transactions during the past couple months).

Rau, who joined Pine Labs in March 2020 after leaving PayU, the Fintech division of Prosus Ventures, stated in December 2020:

“Even now, 5-10% of India is locked down, but what we have seen is that, in August, we deployed 13,500 terminals for store fronts and around 15,000 in September. Then it was around 25,000 in October. So, merchants, who were sitting on the fence and weren’t sure of digitization, have now gone ahead and are saying they have to put digital payments.”

Rau had claimed in December that Pine Labs was servicing around 90% of financing for customer purchases in the retail sector, but this doesn’t include major digital commerce platforms.

Last year, the company reported that it had teamed up with 120 different brands and 35 credit issuers, which includes ICICI Bank and Zest Money. Pine Labs had also revealed in later 2020 that it had a network of 150,000 merchants in 3,700 different cities in India and South Asia.

Pine Labs has reportedly been generating profits (as of December 2020) and the investments from last year should help the company with achieving 50% revenue growth year-on-year, Rau had said.

He had also noted:

“We want to double down on India’s consumption story and we think ‘middle India’ requires access to capital for that consumption, for electronics, motorcycles, etc. Also, small businesses have realized it will be hard for them to compete with big e-tailers without digitization. So, we expect to grow the current monthly terminal deployment of 25,000. Finally, we want to go international.”

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