Pine Labs Acquires API Infrastructure Provider Setu In A $70 Mn Deal

Fintech Unicorn Pine Labs Acquires API Infrastructure Provider Setu In $70-75 Mn Deal

SUMMARY

Post the acquisition, Setu will retain its brand identity, business, teams, and its customers

Setu is an application programming interface (API) infrastructure provider that offers services across bill payments, savings, credit and payments

I am looking at the deal as a completion between online payment stack and an embedded fintech stack: Pine Labs CEO

IPO-bound Pine Labs has acquired Bengaluru-based fintech infrastructure startup Setu to strengthen its offerings. Under the deal, valued at $70 Mn – 75 Mn, Pine Labs has acquired 100% stake in Setu.

Post the acquisition, Setu will retain its brand identity, business, teams, and its customers, Setu CEO and cofounder Sahil Kini said. Moreover, the founders will continue to lead the startup.

Founded in 2018 by Kini and Nikhil Kumar, Setu is an application programming interface (API) infrastructure provider that offers services across bill payments, savings, credit and payments.

“With the partnership Pine Labs has in the financial services ecosystem, we look forward to leverage all of these assets we get along with and continue to build,” Kumar said in a press briefing.

Pine Labs continues to expand its products, its CEO B Amrish Rau said. The startup, which started as a Point of Sales (PoS) provider, gradually also built its offering around instalment payments transactions at the point of purchase.

Unlike other fintech startups, Pine Labs did not start its journey in the last decade. It was founded in 1998 by Lokvir Kapoor. Almost after two decades since its inception, the fintech startup entered the unicorn club in 2020.

Last year, Pine Labs launched Plural, which provides payment services to merchants. Plural has already processed payments of INR 2,000 Cr since its launch, Rao said.

Payments are getting more and more embedded with time, Rao said, adding that transactions are now happening on Instagram and YouTube. “Payments have become more embedded and frictionless in our day-to-day journey,” he said. That’s where Setu comes into play as it has been working on embedded finance.

“The objective is if we can bring embedded finance and embedded payments together, this could be a very powerful proposition out from Pine Labs in the marketplace. We are effectively building for an open-banking infrastructure, an open API infrastructure. The combination between Setu and Plural will become extremely powerful,” Rao said.

“I am looking at it as a completion between online payment stack and an embedded fintech stack,” he added further.

With Setu, Pine Labs has completed its third acquisition this year. In April, it made an investment in Mosambee, an end-to-end payment solution provider. Earlier, it acquired Mumbai-based online payments startup Qfix Infocomm.

The fintech unicorn reportedly also raised $50 Mn in a funding round from PE company Vitruvian Partners in March this year. It also raised $150 Mn from Alpha Wave Ventures in February. Considerably, Pine Labs is gearing up for its NASDAQ listing this year.

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