Pine Labs’ valuation soars to $2 bn in a new funding round
December 22nd 2020: Pine Labs Pvt. Ltd, a fintech startup, raised funding from US-based investor, Lone Pine Capital, in a new round that took its valuation to more than $2 billion (Rs 14,740 crore) as of Monday. The startup also counts PayPal Ventures, Temasek, Actis Capital, Altimeter Capital, Sofina, and Sequoia Capital as its investors. Earlier in January 2020, the startup had achieved unicorn status after an investment from MasterCard – making it the first startup this year to join the $1 billion valuation club. Lone Pine has also been making big money deals in payment and credit-focused fintech firms across the world over the last year. The latest fund-raise makes Pine Labs India’s third most-valued fintech startup after Paytm-parent One97 Communications Ltd (valued at $16 billion) and PhonePe ($5.5 billion).
Amrish Rau, the CEO of Pine Labs stated that the fresh funding will be predominantly deployed in onboarding storefronts across the country onto its ‘Pay Later’ platform. The company will also shore up its Point of Sale (PoS) deployments while expanding its business in South Asia.
Pine Labs is a Noida-based company which was founded in 1998 by Rajul Garg, who quit the company in 2003. The payments company was then taken over by Lokvir Kapoor who is currently the firm's chairman. Initially, it focused on large-scale smart card-based payments and loyalty solutions for Indian metro companies before shifting to its current business model.
“Small businesses and consumers are fast adapting to digital commerce and contactless checkout. We are also seeing tremendous uptake in Pay Later services… It’s time to invest heavily in offline and online commerce across India and South East Asia,” Rau said, adding that the company will focus on maintaining positive earnings before interest, tax, depreciation and amortisation (Ebitda) margin going into 2021.
The company has also shored up partnerships with retail brands such as Croma, Samsung, Apple among others to offer platform services for merchants. Rau said that the company’s focus next year would be on three fronts.“We want to continue to double down on the ‘Buy Now Pay Later’ wave in India,” stated Rau “We also want to continue the terminalization of storefronts as more and more physical retail stores across the country are looking to provide digital payments. Thirdly, we want to expand our business in South East Asian markets.” he added.
This year also witnessed business payment service provider Razorpay and retail broker Zerodha enter the unicorn club with a valuation of a little over $1 billion. Pine Labs plans hinted towards the reintroduction of its cash flow-based lending product for merchants through bank partnerships next month. The company had paused offering the product during the pandemic and is also planning to enter the online payment gateway business.
