Pine Labs, which runs a digital retail payments platform in India, on Tuesday announced a funding of $82 million (Rs 5.34 billion) led by private equity firm Actis Capital and joined by new investor Altimeter Capital. It is not clear if Sequoia Capital, which backed Pine Labs in 2009, partially exited the firm.
Pine Labs is replacing the standard card-centric point-of-sale terminals with a smart, cloud-based payments platform that will reduce costs and drive revenue for retailers. It integrates India’s top 12 credit and debit card issuing banks, and the top 14 merchant-acquirers, on its payment platform.
Pine currently processes 450 million transactions worth over $15 billion in a year. “We are pleased to welcome Actis as our partner for the next phase of our journey. With this capital, we will accelerate Pine’s network penetration in India and expand outside India with our world class technology,” said Lokvir Kapoor, CEO of Pine Labs.
Asanka Rodrigo, Partner and Head of South Asia at Actis, said: “We are thrilled to become a key investor in Pine Labs and partner with Kapoor and Sequoia Capital India who together have built a tremendous business in India.”
Merchants across India have historically had to use multiple payment terminals to process cards issued by various banks, a situation that created additional costs, clutter and headaches around payments reconciliation. Pine Labs solved this problem by creating cloud-based software that can be integrated with a generic point of sale terminal, allowing merchants to accept traditional electronic payment methods such as credit or debit card issued by any bank, as well as new generation methods such as e-wallets, QR code payment solutions or other UPI based solutions, on a single platform.
Pine Labs’ shareholders include Sequoia Capital India, which first invested in 2009 and continues to support the company’s expansion plans as its largest shareholder.
“Pine Labs is a special investment for Sequoia Capital India, because it is a story of incredible grit, first-principles innovation and company building by Lokvir and the management team that spans more than a decade,” said Shailendra Singh, Managing Director at Sequoia Capital (India) Singapore.
“Pine Labs has emerged into a category-defining company with a new cloud-based model for retail payments that supports all payments types. It’s a platform that took years to build and provides a very defensible foundation for the next phase of growth in products and markets. We are thrilled to welcome Actis to the board and look forward to working with them.”
Pine’s cloud-based platform has also enabled the company to create and deploy additional innovative products for retailers, including targeted customer-engagement campaigns; consumer analytics; and in-store consumer financing for partner brands that can be tailored to customers at the point of sale. This innovative consumer financing product, which connects the merchant, the credit card company, the brand and the consumer in real time at the point of sale, has facilitated more thanUS$1 billion in consumer credit on an annualized basis.
The latest products in Pine Labs’ fast-growing portfolio include electronic gift cards, and a pay-by-points product that spans major card loyalty programs. Pine Labs has also partnered with NBFCs to rapidly scale up the merchant lending business.
Over 75,000 merchants across India’s retail, e-commerce, electronics, food and beverage, fashion, financial, pharmacy, telecom and airlines industries are now using Pine Labs.
Pine Labs, which handles approximately 15 per cent of India’s cashless transactions in physical retail stores, is currently deployed at approximately 300,000 payment acceptance terminals. The company aims to reach 1 million payment acceptance points in India in the next three to five years.
In Q4 2017, Pine Labs entered Malaysia with an exclusive partnership with one of their leading banks. The company, which is in talks with over a dozen international banks, now aims to expand to other new markets across Asia and the Middle East.
Actis is a leading investor in growth markets, delivering consistent competitive returns, responsibly. It has a growing portfolio of investments across Asia, Africa and Latin America and has raised over US$13bn since inception. The firm invests through insights gained from trusted relationships and local knowledge, deep sector expertise and an unparalleled heritage, set within a culture of active ownership. Applying developed market disciplines to growth markets, an established team of c. 100 investment professionals in ten countries identify investment opportunities in response to two trends: rising domestic consumption and the need for sustained investment in infrastructure across private equity, energy, infrastructure and real estate asset classes.
Actis has invested in payments businesses across the growth markets operating in more than 50 countries from Brazil to Malaysia helping to build the financial infrastructure of the future. Actis targets consistent superior returns across asset classes over the long-term, bringing financial and social benefits to investors, consumers and communities.