Industry: Banking, Financial services
Global payments technology giant Mastercard is in talks to invest in India’s largest point-of-sale (PoS) solutions provider Pine Labs as part of a $300 million financing round, said three people aware of the development. The transaction, which would value the Singapore and Noida-based firm at $1.2-1.5 billion, will likely involve a mix of primary and secondary shares and give Mastercard a firm footing in the fast-growing merchant acquiring segment.
Venture capital fund Sequoia Capital, the largest stakeholder, could make a partial exit as Pine Labs vaults into the unicorn club of privately-held tech firms with valuation of $1 billion or more. Sequoia has been invested in Pine Labs since 2009 and holds an estimated 68% stake. It could offload 15-25% to the incoming investor, said the people cited above.
Investors like Advent Cap may Also Join
Mastercard and Pine Labs didn’t respond to queries. A spokesperson for Sequoia Capital said, “We have nothing to share at this time.”
People familiar with the fundraising talks said other investors like Advent Capital may join Mastercard in the latest round.
The fundraise, which could close over the next few weeks, will be the first by Pine Labs since it raised $125 million in equity financing in 2018 led by the likes of Temasek, the investment firm backed by the government of Singapore, and US-based online payments company PayPal, valuing it at $800 million.
Prior to that, in March 2018, the company raised $82 million in funding, led by investment firms Actis and Altimeter Capital, according to data collated by Tracxn. Pine Labs was founded by Lokvir Kapoor, Rajul Garg and Tarun Upaday in 1998.
This will not be the first time Sequoia Capital is selling Pine Labs shares. In 2017, the venture capital firm had offloaded a stake to Madison Capital as part of a larger $180 million block deal.
Pine Labs has been regarded as an attractive acquisition target in the recent past. The Times of India reported In October last year that Naspers-owned PayU was evaluating a majority share purchase in the company, while two other investors — China’s Tencent and pension fund CDPQ — were in talks to acquire minority stakes.
The company has been broadening its product suite in the past few years. The merchantfocused, last-mile retail transaction technology platform also provides collateral-free business loans, having partnered with top banks and nonbanking finance companies (NBFCs), besides offering equated monthly installment (EMI) solutions at the point of sale.
It acquired Bengaluru-based startup Qwikcilver for $110 million in March last year, as it looked to deepen its presence in the loyalty and gifting services segment, funding the transaction from capital raised from its investors and cash reserves.
Pine Labs reported total revenue of Rs 503.2 crore in FY19, up from Rs 336.1 crore in the previous fiscal. Losses widened to Rs 13.7 crore in the 12 months ended March 2019 from Rs 2.5 crore in the previous financial year, according to paper.vc.Source: Economic Times