Pine Labs may raise additional funds in coming weeks; aggressively scaling online biz

Close on the heels of a $285-million investment round, fintech major Pine Labs may raise additional funds in the coming weeks as it continues to receive investor interest, according to a top company official.

The company also aims to process $1 billion worth of online transactions this fiscal, as it scales its offerings for online merchants and helps offline retailers in India expand their presence into the virtual space.

Pine Labs Chief Executive B Amrish Rau said the company was looking at raising over $100 million but it ended up raising $285 million.

“We continue to have some more interest coming through and there are a few investors who are likely to join this round and, hence, we just called it as a first close (at $285 million).

“So, there could be a little bit more but I cannot really say that will be 25 or will it be 100,” he said.

He added that if the additional round happens, it will be in the next few weeks.

In May, Pine Labs had announced raising $285 million funding from investors including Baron Capital Group, Duro Capital, Marshall Wace, Moore Strategic Ventures, and Ward Ferry Management. Existing investors Temasek, Lone Pine Capital, and Sunley House Capital also participated in the round.

While Pine Labs had not disclosed the valuation, reports pegged it at about $3 billion.

The fresh funding, which will be done at the same valuation, will be a mix of primary and secondary funding, Rau said but did not name the investors it is in discussions with.

“We already have some investors in place. So, it’s not that I’m searching for any investors. We already have some of these investors that couldn’t close during the first close, so it’s those investors we will be brought in.

“The investors are pretty much identified, it’s just that they needed to go through their own internal approvals,” he explained.

Talking about its business in the online merchant’s space, Rau noted that aspects like data security and platform scalability are more complex in the offline world than online.

“We want to bring these capabilities (what we have built for offline) into the online world. So, that is something that we will focus on,” he said.

Many of its small and mid-tier offline merchants are going online and they are looking for a common offline-to-online platform for doing it, Rau.

“We think we can have a key position to deliver to that.

“When it comes to data security, online security, I think those are becoming of extremely high importance, the regulator is also looking for rugged, scalable systems which can which can stand up to the transaction growth which is happening in India,” he said.

Rau said the company currently processes around Rs 100 crores worth of online volumes and is looking at scaling that up to about $1 billion by the end of 2021-22 in India.

In April, Pine Labs had acquired Fave, which provides QR payments and loyalty cashback to restaurants and retailers in Southeast Asia, in a deal valued at over $45 million (about Rs 339 crore). The company, at that time, had said Fave will hire over 100 new employees in South East Asia and India.

“We are looking to bring Fave – the acquisition that we made in Singapore and Malaysia – into the Indian market. Indian consumers have a lot of benefits available when it comes to online purchases.

“However, the small- and mid-tier Indian merchants are still looking to find ways in which to engage consumers better in the offline world,” Rau said.

That is what Fave focuses on and, so, Pine Labs is looking at bringing those capabilities into the offline world in India, he added.