Pine Labs Valuation: $3 Billion in New Funding Round

Pine Labs Secures $285 Million in Funding to Enhance Payment Solutions

Pine Labs, a company providing payment terminals, invoicing solutions, and working capital to businesses, announced on Monday the completion of an initial funding round totaling $285 million. This investment will be utilized to broaden the firm’s service offerings and develop a robust online payments gateway, furthering its nearly two-decade presence in the market.

Investment Details and Valuation

The funding round saw participation from Baron Capital Group, Duro Capital, Marshall Wace, Moore Strategic Ventures, and Ward Ferry Management. Existing investors, including Temasek, Lone Pine Capital, and Sunley House Capital, also contributed to this financing.

As a result of this investment, Pine Labs’ valuation has increased to $3 billion, a significant rise from approximately $2 billion in December of the previous year and $1 billion in early 2020. The company maintains operations across multiple Southeast Asian countries.

Founder Liquidity and Financial Performance

B. Amrish Rau, CEO of Pine Labs, shared in an interview with TechCrunch that the new funding facilitated secondary transactions for the company’s founders, employees, and early investors, notably Sequoia Capital. He also indicated the possibility of extending the funding round, highlighting that the startup currently maintains positive EBITDA.

“We are pleased to welcome prominent investors such as Marshall Wace, Baron Capital Group, Ward Ferry Management, Duro Capital, and Moore Strategic Ventures to Pine Labs’ established investor base,” Rau stated. “This marks an exciting stage in our growth as we expand into new markets.”

Merchant Services and Network Integration

Pine Labs currently serves a network of over 140,000 merchants. Its cloud-connected payment terminals provide a comprehensive suite of services, including access to working capital for businesses.

A key differentiator for Pine Labs is its integration with over two dozen banks and financial technology partners. This contrasts with competitors who typically limit integration to a single bank. New partnerships for rival firms necessitate the deployment of new hardware, increasing costs for both the fintech company and the financial institution. This often results in businesses having multiple terminals.

Banking Ecosystem Expertise and Analytics

Rau explained that Pine Labs’ extensive banking integration is a direct result of its long-standing relationships and specialized knowledge within the financial ecosystem. The company has deployed approximately 600,000 payment terminals to date.

Pine Labs leverages an analytics application based on bank debit card data to assess credit availability for each cardholder. Furthermore, the company facilitates the conversion of larger payments into Equated Monthly Installments (EMIs) through its Pine Pay Later application. During the pandemic, the platform was adding over 10,000 new businesses monthly.

Market Leadership and Acquisitions

Pine Labs holds a leading position in several market segments. The 2019 acquisition of Qwikcilver resulted in the company controlling over 95% of the gift card market share as of March 2020. Its point-of-sale machines are also among the most widely utilized in the industry.

Investor Perspective

Amit Rajpal, CEO and Portfolio Manager of Marshall Wace Asia, commented, “We are enthusiastic to participate in the technological advancements Pine Labs is driving in the payments sector and the efficiencies it creates through enhanced consumer access to financial products like Buy Now Pay Later (BNPL). The potential for an Indian business to globally adopt its Intellectual Property is also significant.”

Future Plans and Expansion

Rau stated that the newly acquired capital will be allocated to the development and expansion of an online payments gateway. Initial clients will include hospitals, pharmacies, government entities, and other organizations. The company also intends to integrate offerings from Fave, a Southeast Asian startup acquired last month, for merchants in India.