Although the exact amount of shares sold by Pine Labs remained secret, two individuals close to the firm revealed as anonymous source that the funding values the FinTech startup at close to $1 billion. This funding comes at a time when digital payments providers in India are increasingly attractive to investors. The funding round at Pine Labs comes after the company initiated sale talks with tactical bodies but unfortunately didn’t conclude in a deal.
Pine Labs provide cloud-based point of sale (PoS) payment solutions, enabling merchants to accept credit or debit card payments, e-wallets, QR code payment solutions and unified payments interface (UPI)-based solutions. The company is backed by Sequoia Capital which first invested in the company back in 2009 and holds the largest shares in the firm.
According to Kapoor, Pine Labs carry out 450 million transactions every year amounting to over $15 billion.
“We have a presence of about 300,000 PoS in the market, which is about 10% of the footprint in the country. We have about 15% of the card volume flowing through our network,” said the CEO of Pine Labs.
Having exponentially expanded its market hold in India over the last two-to-three years, the payment service provider is now seeking to expand out of India after already stepping in the Malaysian market back in the December quarter.
“We are growing in the domestic market at 60-70%, year-over-year. We have gone live in Malaysia, which is our first international market,” said Kapoor.
“The plan is to continue to grow in the domestic market at the rate that we have been growing at. In the next three-to-four years we expect to grow from the current level of 300,000 to 1 million terminals, and we plan to go live in four or five markets over the next three-four years. In the next two-three years, we are looking at a revenue of around 25% from international markets,” said Kapoor.
Consequently, the funds received by Actis and Altimeter will serve to fulfill the purpose of stepping in the international markets.
“When we enter a new market, we have to set up the infrastructure for the processing of payments, which includes networks, data centres, security set-up, support services. All of that requires a few million dollars,” said the CEO.
After this round of investment, Pine labs is all settled to compete with the likes of Mswipe and Ezetap. A portion of the funds raised will be also destined to develop new services for merchants such as targeted customer-engagement campaigns, consumer analytics and in-store consumer financing. New products such as electronic gift cards and pay-by-points product that acts like a loyalty card are also being introduced. Additionally, the film collaborated with non-banking finance companies for merchant leading.
“These services contribute to 30% of Pine Labs’ revenue,” said Kapoor.