Sequoia-backed Pine Labs raises $125 mn from Temasek and PayPal

This is the second fund-raising for the company in this calendar year after it raised $82 million in an earlier investment round

Payment acceptance solutions provider Pine Labs announced on Thursday that it has sold a minority stake in the country to Singapore-based investment company Temasek and global payments provider PayPal for $125 million. 

Pine Labs said that its investment comes at a time when the company is looking to pivot from its leadership position in the offline payments space by expanding to online payments as well. 

“We’re teaming up with Temasek and PayPal at a time when the Indian payments market is at an inflexion point,” said Lokvir Kapoor, Founder of Pine Labs. “We are a leader in the offline payments space, a position that is critical in enabling the ecosystem of online payment products. The investments will help us move a step closer to our vision for building a world-class merchant-centric payments ecosystem.”

Pine Labs said that it would look to expand in regional markets with the expertise and help of Temasek’s deep connections with Asian financial technology companies, which are bound to provide a fillip to Pine Labs’ growing line of products. 

This is the second fund-raising for the company in this calendar year after it raised $82 million in an investment round led by Actis Capital, along with Altimeter Capital in March this year. The Sequoia-backed company was valued at $1 billion in that investment round. 

The company currently boasts more than 300,000 point-of-sale (PoS) terminals in the country which account for 10 per cent of total terminals and 15 per cent of the card transaction values flowing through. 

The company has also gone live in Malaysia which is its first international market after dominating the domestic space in India. 

Pine Labs offers a gamut of merchant related services ranging from NBFC-backed short-term lending, end-to-end payment solutions, gift and loyalty cards as well as consumer analytics and in-store financing. 

“We believe it is possible to achieve India’s cashless vision by digitising the payments acceptance infrastructure,” said Vicky Bindra, CEO of Pine Labs. 

“We are furthest ahead in this journey in India with an annualised GTV of $15 billion on a base of approximately 300,000 payments acceptance points. This positions us as a critical and strategically important player in the offline-online convergence in India. Pine is also on track to originate over $1 billion of instant loans at PoS terminals for card issuers and partner NBFCs this fiscal year, demonstrating the power and utility of our payments platform. The investments from Temasek and PayPal will help accelerate Pine’s growth.”

Sequoia remains the largest shareholder in the company with its first ever investment coming in the year 2009. 

“We are thrilled to welcome Temasek and PayPal to the company,” said Shailendra Singh, Managing Director of Sequoia Capital (India) Singapore. “In the last year, Pine Labs has added four valuable equity partners, including Actis and Altimeter, who have significant expertise in the global payments industry. This is a huge endorsement of the team’s accomplishments, and provides the company a significant strategic advantage.” 

Singapore-based Temasek is also said to be in talks with Fino Paytech, India’s first payments bank to infuse funds in exchange of a minority share to help the bank expand into digital products and expand its market.