After entering the unicorn club last year, retail payments company Pine Labs is now looking to hit the public market by March 2022 in the US. Pine Labs has reportedly begun early-stage discussions with at least four merchant bankers like JP Morgan, Citi and Morgan Stanley to work on its initial public offer (IPO).
The company is aiming to hit $5 Bn valuation with this IPO, however the plans could change as the discussions progress. The company was last valued at $2 Bn, after it raised an undisclosed amount from America-based hedge fund Lone Pine Capital. Besides this, the company counts Sequoia, Temasek and Mastercard as investors.
People aware about Pine Lab’s IPO plans told ToI that the company is also betting on the expansion in Southeast Asia to double down its growth momentum. The company is also expanding its ‘Buy Now Pay Later’ product and caters to about 90% of the financing for consumer purchases in the retail market excluding large ecommerce players like Flipkart and Amazon, sources close to the matter have said.
Pine Labs’ CEO Amrish Rau officially declined to comment on the matter.
Founded in 1998 by Lokvir Kapoor, Pine Labs enables online and offline retail transactions. Rau had taken up the role of the CEO of the company towards the end of financial year 2020 replacing Vicky Bindra, who had led Pine Labs since May 2018. Rau had taken over just after Mastercard’s undisclosed investment in the company, at a valuation of $1.6 Bn.
Pine Labs claims that its cloud-based platform powers over 3.5 lakh PoS (point of sale) terminals across 3,700 cities and towns in India and Malaysia. Further, over 1 lakh merchants across sectors such as electronics, food and beverage, fashion, airlines, and more, use Pine Labs’ solutions. About 15 major banks, seven financial institutions and more than 100 brands are a part of Pine Lab’s platform that processes payments worth $30 Bn every year.
The company had reported a revenue growth of 43%, from INR 491.29 Cr in FY2019 to INR 701.62 Cr in FY2020. But the spike in revenue came at the cost of rising losses as the company’s expenses grew 56%, from INR 490.86 Cr to INR 765.61 Cr in the same time period. Its losses increased 1,654%, from INR 3.29 Cr in FY2019 to INR 57.72 Cr in FY2020.
However, considering the scale of the business of the 1998-founded payment solutions company, the loss shouldn’t be a matter of worry. The loss-making streak began in FY18 after a profitable run.