Temasek-backed Pine Labs raises $807 million from investors

Pine Labs offers solutions for in-store and online payments as well as prepaid, loyalty and "pay later" programmes.
Pine Labs offers solutions for in-store and online payments as well as prepaid, loyalty and "pay later" programmes.PHOTO: PINELABS_OFFICIAL/INSTAGRAM

BENGALURU (BLOOMBERG) - Pine Labs, a payments platform for merchants in India and South-east Asia, closed a US$600 million (S$807 million) fund-raising round with some of the world's largest investors, including Fidelity Management & Research and BlackRock, as it targets an initial public offering (IPO) within 18 months.

The Singapore-based start-up, which offers solutions for in-store and online payments as well as prepaid, loyalty and "pay later" programmes, is valued at US$3 billion, chief executive Amrish Rau said. Investors participating in the round included a fund advised by Neuberger Berman Group and India's IIFL Finance and Kotak Funds.

Banks and merchants pay monthly fees for using Pine Labs' software as a service, with the start-up also receiving micro-fees on every transaction. Payment services are gaining popularity in Asia as smartphones become more widespread, benefiting providers such as Pine Labs.

"It's a product from India that's succeeded in Malaysia and Singapore and is entering Indonesia and Thailand," Mr Rau said in an interview via video call. "We've got a good, Ebitda (earnings before interest, tax, depreciation and amortisation)-positive story as we plan our IPO in the next 18 months.

The IPO will likely take place in the United States, Mr Rau said.

"With our size and scale, we want to make it a global IPO."

The start-up offers digital solutions for the checkout point, enabling transactions from billing to payments and reconciliation. Its "pay later" offering covers 100 million customers in India, Singapore and Malaysia, allowing buyers to pay in three, six, nine or 12 monthly instalments for products such as Apple and Samsung Electronics devices.

The company also runs a prepaid gifting platform called QwikCilver in India, South-east Asia, the Middle East, Europe and Australia.

Its customers include Apple, Starbucks and McDonald's, with Sequoia Capital, Temasek, PayPal and Mastercard among its backers.

India's fintech industry is growing at about a 50 per cent annual rate and South-east Asia is following closely behind, Mr Rau said. Pine Labs is growing at about a 60 per cent annual clip as stores expand their payment options.

"A growing number of merchants in Asia want to create faster and more interesting checkout experiences," added Mr Rau. "They want solutions that help them compete with large online companies."

The start-up acquired pay-and-save app Fave in April for US$45 million. That app now has six million users and more than 40,000 merchants.