Ali Hasan
Pine Labs is shaping the future of merchant commerce in Asia
Introduction – Pine Labs is a merchant commerce platform that provides financing and last-mile retail transaction technology and various financial solutions for merchants. These solutions are aimed at helping merchants in increasing their revenue and reducing cost, complexity, and risk.
The company connects financial institutions and consumer brands to enable merchants to deliver value to their retail customers. It powers offline and online last-mile retail transactions, provides customer insights for targeted sales, and offers financial solutions.
The company’s cloud-based platform powers more than 350,000 POS terminals across 3700 cities and towns in India and Malaysia. Over 100,000 merchants across sectors such as electronics, food and beverage, fashion, airlines, and more, use Pine Labs’ solutions.
15 major banks, 7 financial institutions, and more than 100 brands are part of Pine Labs’ platform. It was founded in 1998 and is headquartered in Noida.
Early Days – Pine Labs was started way back in 1998 by Lokvir Kapoor, Rajul Garg & Tarun Upaday. The company evolved from a petroleum automation retail solutions player to becoming a payments products and services firm for merchants.
Then, in 2004, Pine Labs ventured into mainstream payments and financial offerings for merchants. The company acquired a gifting startup Qwikcilver for $110 million in March 2019. In February 2019, the company partnered with RAKBANK to launch a payment platform in the UAE.
In March 2018, Google Pay came into partnership with Pine Labs to capture the offline payments space in India. The company was partnered with UnionPay in January 2019. In April 2021, Pine Labs acquired Southeast Asian deals and cash-back platform Fave for $45 million.
Fave’s co-founders Joel Neoh, Yeoh Chen Chow, and Arzumy MD will continue working in the company to expand its presence across Southeast Asia and India.
Marketing Strategy – They market themselves as a company that provides instant EMI options with flexible tenures of 3, 6, 9 & 12 months.
They enable small retailers with their revolutionary mobile app that converts your NFC smartphone into a card machine and lets you accept all forms of digital payments, including cards via a simple ‘Tap n Pay’.
They used a tagline #HarMobileCardMachine in their digital marketing campaign where they focused on turning your smartphone into a POS machine which will allow your business to grow exponentially.
User Base & Valuation – Pine Labs has more than 70,000 retailers across India, including major retail outlets such as Mark’s and Spencer’s Retail, Pantaloons, Shoppers Stop and Westside.
It is one of the unicorn companies, with a valuation of over US$1 billion. They just had a new funding round which valued Pine Labs at $3 billion, up from about $2 billion in a December round last year and $1 billion in early 2020.
Funding – Pine Labs has raised a total of $738.2 million in funding over 9 rounds. Their latest funding was raised on Jul 6, 2021 from a Venture – Series Unknown round. Pine Labs is funded by a total of 22 investors. Fidelity Management and Research Company and Kotak Mahindra Bank are the most recent investors.
Other investors are as follows:-
- Tree Line Capital Partners
- IIFL Asset Management
- BlackRock
- Baron Capital
- Marshall Wace
- Moore Strategic Ventures
Revenues & Losses – Pine Labs saw its revenue grow 43%, from INR 491.29 Cr in FY19 to INR 701.62 Cr in the fiscal year ended March 31, 2020 (FY20). The company’s expenses grew at a slightly faster clip by 56%, from INR 490.86 Cr in FY19 to INR 765.61 Cr in FY20.
So, the company’s net loss increased by 1,654%, from INR 3.29 Cr in FY19 to INR 57.72 Cr in FY20. 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.
Of the company’s total revenue, INR 254.72 Cr came from the sale of products such as Pine Labs’ PoS payments devices, while INR 434.59 Cr came from the sale of services. Other income, which includes the interest on fixed deposits and current investments, stood at INR 12.31 Cr.
Acquisitions – So far Pine Labs has acquired 2 organizations which are as follows:-
- Fave in $45 million
- QwikCilver Solutions in $110 million
Awards – They have won several awards which are as follows:-
- Best Digital API award – Pine Labs was declared the winner of the ‘Best Digital API’ award in the category of Best Technology Solutions at the 11th India Digital Awards organized by the Internet and Mobile Association of India (IAMAI).
- IAMAI’s 10th India Digital Awards at the India Digital Summit – Pine Labs won a payment and fintech award in the category of Best Payment Technology/Solution provider at the 10th India Digital Awards in February 2020. We won this award for enabling the EMI feature on our Android PoS.
- Enterprise IT World CIO 500 – The Change Agents 2019 award was conferred to Sanjeev Kumar, Chief Technology Officer, Pine Labs, in December 2019 at CIO500 Conclave & Awards 2019, an event organized by Enterprise IT World.
- Frost & Sullivan Awards – Pine Labs won the 2019 Indian Merchant Platform Customer Value Leadership Award at the Frost & Sullivan – 2019 India Best Practices Awards in October 2019.
Present Time & Future Goals – Presently Pine Labs provides mobile point of sale (PoS) solutions that allow merchants to accept credit and debit card payments. Some of the offerings of Pine Labs include Instant EMI, Instant Discounts, Cashback Programs, PaybyPoints, Loyalty Solutions, eWallet, Targeted Promotions, Dynamic Currency Conversion and Gift Solution.
As of now, they offer everything that’s needed for a company that helps small businesses with digital infrastructure. They are growing at a good pace and we would be very happy to see them make India a digitally advanced country in the future as well.
Conclusion – To sum it up, we need more startups like Pine labs so that more and more small businesses can compete with the likes of big MNCs. The internet is a fundamental right and it’s the tool which has become a way by which small businesses can level of the competing field.
After the covid-19 pandemic, it’s now more than necessary than anything to go digital and make the most of the technological infrastructure because without the leverage of the internet, you can’t achieve anything great.
Hence, if more and more tech savvy startups appear on the startup scenario, then we can transform entire India digitally one step at a time. We wish Pine labs all the very best for their future and we hope that they’ll help more and more businesses to take the digital route.
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