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IPO-bound Indian merchant payments platform Pine Labs raises USD 600 million from Fidelity, BlackRock

Written by Moulishree Srivastava Published on     3 mins read

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Pine Labs is reportedly looking at an IPO in the US within the next 18 months.

Ahead of its initial public offering next year, Indian merchant commerce platform provider Pine Labs has raised USD 600 million from Fidelity Management, BlackRock, Ishana, Tree Line, and a fund advised by Neuberger Berman Investment, along with participation from IIFL Asset Management and Kotak, the company said on Tuesday.

This comes barely two months after the Noida and Singapore-headquartered company secured USD 285 million at a valuation of USD 3 billion in primary and secondary equity sales from public market investors, including Baron Capital Group, Duro Capital, Marshall Wace, Moore Strategic Ventures, and Ward Ferry Management. The fresh funding takes the total capital raised by Pine Labs to about USD 1 billion.

At the time, Pine Labs was reported to be eyeing an IPO in the US by March 2022. However, that timeline seems to have been stretched to the end of next year.

“Over the last year, Pine Labs has made significant progress in its offline to online strategy in India and its direct-to-consumer play in Southeast Asia,” said Pine Labs CEO B. Amrish Rau in a statement. “Our full-stack approach to payments and merchant commerce has allowed us to grow in-month merchant partnerships by nearly 100% over the last year.”

Pine Labs runs a cloud-based platform that provides in-store and doorstep payment solutions to retailers, including a pay later option at the point of sale. It also offers enterprise automation systems such as inventory management and customer relationship management, aside from allowing corporate customers to issue, process, and distribute digital gift cards.

In April 2021, Pine Labs acquired Fave, a Southeast Asian loyalty and cashback platform, for USD 45 million. The five-year-old startup allows merchants to accept digital payments from customers and offer the latter rewards to retain them. Fave is currently operational in 35 cities across Malaysia, Singapore, and Indonesia and will soon be launching in India, said Pine Labs in a statement. Once launched in the home market, consumers will be able to use the Fave app to earn rewards when making purchases with 500,000 merchants across 3,700 cities in India, the company claimed.

Startup

With millions of dollars in its treasure chest, Pine Lab, which claims to have more than 150,000 merchants on its platform, is now focusing on going deeper into Southeast Asia and the Middle East.

“We will be launching our merchant payment solutions in the Middle East by early next year,” Rau told local media Livemint in an interview in May 2021. He added that with Fave in its kitty and Mastercard as an investor, the company is “getting a good play to go deep into Southeast Asia.”

According to Shailendra Singh, managing director at Sequoia Capital, Pine Labs has rapidly transformed from a single product company allowing retail acceptance of payments to a broader payments platform.

“With leadership across multiple categories, the company is very well positioned to help drive immense value to its merchant partners in India and across other Southeast Asia markets,” he said.

Founded in 1998 by Lokvir Kapoor, Tarun Upaday, and Rajul Garg, Pine Labs started as a smart card provider for petroleum companies. Six years later, it became a point-of-sale solutions firm and began processing credit and debit card payments. In 2009, Sequoia came onboard with a USD 1 million seed check that helped the company enhance its technology platform and begin offering payment solutions to merchants. In 2013, Pine Labs incorporated Pine Labs Pte Ltd in Singapore, which became the parent company.

Pine Labs eventually partnered with non-banking finance companies to provide working capital loans and other financial services to its merchants, vendors, and business owners. The company currently claims to be “well-financed and EBITDA (earnings before interest, taxes, depreciation, and amortization) profitable for several years.”

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