Pine Labs' valuation tops $2 bn on closing funding from Lone Pine Capital

Funding makes it country's most valued fintech after Paytm and PhonePe. Pine Labs silent on deal size, industry sources put it at $75-100 million

Unicorn fintech company Pine Labs has raised an undisclosed funding round led by billionaire hedge fund manager Stephen Mandel-founded Lone Pine Capital, taking the valuation of the Noida-based firm to over $2 billion. This makes it the most valued fintech company in the country after Paytm and Walmart-owned PhonePe. The firm did not reveal the amount it has raised from Lone Pine, but according to industry sources, the funding is about $75-100 million. US-based Lone Pine’s investment follows the strategic investment made by Mastercard in January 2020, when Pine Labs attained unicorn status or $1 billion valuation.

“We are thrilled to welcome Lone Pine as an investor during this exciting and transformative phase of Pine Labs’ growth journey,” said B Amrish Rau, CEO, Pine Labs.

Small businesses and consumers are fast adopting to digital commerce and contactless checkout. Pine Labs is also seeing tremendous uptake in Pay Later services and has now enabled nearly 150,000 outlets for this. “It’s time to invest heavily in offline and online commerce across India and SEA (Southeast Asia),” said Rau.

Rau, who joined Pine Labs as CEO early this year, brings two decades of experience in information technology, finance and fintech. His start-up Citrus Pay, which was funded by Sequoia India, was acquired by PayU in 2016 in one of the largest fintech acquisitions.

Mala Gaonkar, Portfolio Manager and Managing Director at Lone Pine, said that the Pine Labs team is leveraging key structural changes taking place across payments and fintech globally. This includes integration of software and payments at the point-of-sale and the digitisation of small-to-medium enterprises. Also, there is rapid adoption of buy-now-pay-later offerings. 

“We are excited to partner with Pine Labs as they innovate at scale in the payments and merchant commerce space, benefiting consumers, merchants and financial institutions,” said Gaonkar. “We look forward to the road ahead.”

Earlier in December, Pine Labs and Mastercard jointly announced that they will expand their integrated “pay later” solution to five South-East Asian markets early next year.

From its beginnings as an offline retail payment provider a decade ago, Pine Labs has evolved into offering payment acceptance technology, stored value products, in-store consumer credit and other merchant solutions in India, Southeast Asia and the Middle East.

Today, Pine Labs serves more than 150,000 merchants in 3,700 cities across Asia and the Middle East. This year Pine Labs made an investment and formed a strategic partnership with Malaysia-based company Fave, which provides QR payments and loyalty cashback to restaurants and retailers. Nearly 50,000 of Fave’s and Pine Labs’ merchants in Southeast Asia will benefit immediately from the partnership.

Pine Labs competes with other fast-growing fintech companies such as BharatPe, Mswipe, Paytm and Razorpay. Delhi-based BharatPe, which provides payment technology and digital lending for offline businesses, including kiranas, is seeing a three-fold growth in transaction value and two-fold growth in volumes amid the pandemic. The company is already clocking an annualised transaction value of $8 billion, of which $6 billion is QR (quick response) code and $2 billion Swipe business. 

Newly-formed fintech unicorn Razorpay is also betting big on helping small businesses digitise. The Bengaluru-based company is launching a string of products, from insurance to vernacular language support, aimed at empowering the next phase of digital growth for small businesses in India. The firm plans to achieve $50 billion TPV (total payment volume) by the end of 2021.

The digital payments space in India is expected to rise five-fold to reach $1 trillion by 2023, and would be led by growth in mobile payments, according to a report by financial services company Credit Suisse.

Highlights:

. Pine Labs crosses $2 billion valuation, after financing round from Lone Pine.

. Funding is about $75 million-$100 million, according to industry sources.

. This makes it the most valued fintech company in the country behind Paytm and PhonePe.

. New funding follows an investment made by Mastercard this year when Pine Labs became a unicorn.

. Digital payments space in India is expected to rise fivefold to reach $1 trillion by 2023.