Pine Labs, the largest POS player making annual payments of $ 30 billion with the latest tranche, the company has completed the investment round, increasing the total amount of funding to $ 600 million. The fintech start-up is valued at $ 3 billion after the fundraiser.
Ishana, Tree Line, Neuberger Berman Investment Advisers, IIFL AMC and Kotak are the other new investors. IIFL AMC channeled its investment through its late-stage technology fund, Pine Labs said in a statement Tuesday.
Pine Labs represents 14% of card spending across a network of 600,000 POS devices and its cloud-based SaaS platform Plutus supports payments in various modes including gift cards, loyalty points and on credit (EMI) by integrating multiple issuer and acquirer banks into one single platform.
Typically, Pine Labs’ target segments are large retailers versus SMBs for its competitors. The business model consists of the fixed rental of POS devices and the bundling of value-added services (analytics, billing and reconciliation, EMI financing, loyalty programs, etc.).
The Noida-based company kicked off the financial round in May with a fundraising of $ 285 million from a number of investors, including the Baron Capital Group and Moore Strategic Ventures. Pine Labs said it was “still well funded and Ebitda-profitable for several years”.
The company, which has Sequoia Capital, Temasek Holdings, PayPal and Mastercard among its other supporters, is preparing for a possible US listing in the next 18 months and is joining a number of Indian startups that are making plans to go public.
Pine Labs is virtually the only gift card management provider in India with over 95% market share. It has also become a dominant player in offline POS finance for enduring consumers with a 90% market share outside of Bajaj Finance, offering EMIs in conjunction with more than 120 brands, over 35 lenders and 150,000 merchants for a fee . It enables its banking partners to offer interest-free EMIs not only to credit card users but also to debit card customers. Its Buy Now Pay Later (BNPL) has scaled to provide $ 2 billion in consumer loans in India with ATS of ATS 25,000 in Fiscal Year 20.
It earns commissions of up to 0.5% of the transaction value from the lender as commitment fees in addition to payment-related fees
Fee from the dealer.
Pine Labs also provides retailers with short term (up to 90 days) financing for working capital and inventory, and is working with NBFCs to provide retailers with access to simple, safety-free business loans. Merchants have the option to repay these loans by choosing a flexible amount from daily card sales at Pine Labs’ PoS terminal. She is also working on building a neo banking platform for her merchants through which she would like to embed all banking services in partnership with a bank.
“Over the past year, Pine Labs has made significant strides in its offline-to-online strategy in India and direct-to-consumer gaming in Southeast Asia. Our full-stack approach to payments and merchant commerce has enabled us to increase merchant partnerships by almost 100% over the past year, â€said CEO B Amrish Rau.
The size of the Indian fintech market was estimated at 1.9 trillion in 2019, and the segment is expected to grow 22.7% CAGR in 2020-25, EY analysts said in a report released in March. India and China had the highest fintech adoption rate in the world’s emerging markets in March 2020. India had an adoption rate of 87% versus the global average of 64%, they said.
