Date: English EditionEnglish Editionहिन्दीગુજરાતીमराठीবাংলাಕನ್ನಡമലയാളംதமிழ்తెలుగు | Print Edition10 mins read9 mins read3 mins read
Pine Labs chief executive Amrish Rau said the deal was significant, without commenting on the deal size.
ET reported on February 2 that Pine Labs was thinking of acquiring Setu in a cash-and-equity deal in the range of $70-$100 million.
After the acquisition, Setu will work independently, retain its brand entity and continue to serve its existing merchants.
Pine Labs, through the acquisition, will enter into embedded finance, and gain access to Setu’s API infrastructure stack to extend new services for its online merchant partners.
In October 2021, Pine Labs said it would enter the payment gateway segment for online merchants and new age direct-to-consumer (D2C) brands with the launch of Plural, which provides payment services to merchants.
Plural has already clocked Rs 2,000 crore in payment processing value since its launch.
Rau said Pine Labs can provide
such as identity management and embedded fixed deposits and allow merchants to release a line of credit to their customer partners with this acquisition.
“Payment transactions are becoming more and more embedded. In the future, data and identity will also be delivered in a frictionless manner. That is where Setu has done some tremendous work. If we can provide embedded finance and deliver open API infrastructure to our merchants, the combination between Setu and Plural will be important,” Rau said.
The acquisition comes at a time when Pine Labs has been looking to list in the US market. ET reported on January 11, citing sources, that the company had filed for a ‘confidential’ initial public offering (IPO) worth $500 million with the US Securities and Exchange Commission.
However, with the current market downturn, Pine Labs has assumed a wait-and-watch approach to its listing plans, sources told ET earlier.
Rau declined to comment on Pine Labs' listing plans.
Founded in 2018 by Sahil Kini and Nikhil Kumar, Setu provides API infrastructure that allows banks and other financial institutions to launch financial services on its platform. It also allows companies to break through conventional modes of loan assessment such as SMS readings, screen scrapings, and file uploads.
Till date, Setu has raised about $18.5 million from Falcon Edge, Lightspeed Venture Partners US, Lightspeed India Partners and Bharat Inclusion Seed Fund.
“We believe democratization of technology will yield better results in making financial products accessible to all. Therefore, we have our APIs open for the developer community. Pine Labs’ network of merchants and issuers coupled with our API integration prowess will help achieve great results in managing personal finance, monitoring loans to predict default rates, and credit underwriting, among others,” Setu’s chief executive Kini said.
“The kind of infra Setu is building will be very important for India in the years to come and I am happy that they are relentlessly moving towards that goal and this partnership with Pine Labs will help them to accelerate,” said Nandan Nilekani, cofounder and chairman of Infosys Technologies Limited.
Earlier this year, Pine Labs acquired Mumbai-based online payments startup Qfix Infocomm, and picked up a majority stake in payments solution provider Mosambee. The investment was to bolster its presence across the unorganised retailer segments including kirana (corner) stores.
Last year, it bought Kuala Lumpur-based payments and discovery platform Fave in a $45-million all-cash deal and was planning to enter the consumer payments space in India.