Pine Labs raises $285 million to expand installment lending in Asia

Pine Labs has raised $285 million in its latest funding round, including participation from Singapore’s sovereign fund Temasek, to continue its geographic and product expansion.

The New Delhi-based startup raised funds from eight different firms as it expands its global investor base. The new investors included Baron Capital Group, Duro Capital, Marshall Wace, Moore Strategic Ventures and Ward Ferry Management. Three existing investors also participated in the round to bolster Pine Labs’ capital base: Temasek, Lone Pine Capital and Sunley House Capital. The funds will be used to take its buy now/pay later offering called Pay Later to newer markets in Southeast Asia.

“We are very excited to be a part of the technological transformation that Pine Labs is driving on the ground in payments and the multiple interlinkages and efficiencies it is able to create by providing faster, cost effective consumer access to a broader range of financial products such as BNPL, where it is driving a pioneering effort on behalf of the financial system,” Amit Rajpal, CEO and portfolio manager of Marshall Wace Asia, said in a press release. “We are also excited about an Indian business being able to drive regional and potentially global adoption of its intellectual property and this represents significant optionality for the future.”

In March, Pine Labs launched a buy now/pay later solution in Malaysia and then signed the country’s largest sports retailer, Al-Ikhsan, to offer the service in its 136 stores. Pine Labs, which provides omnichannel merchant acquiring services across Southeast Asia and the Middle East claims to have a 95% market share position in the offline buy now/pay later segment, which is known in India as equated monthly installments or EMI.

Pine Labs serves more than 150,000 clients with its online and offline merchant acquiring solutions. In April, the company acquired Fave, a Southeast Asia loyalty rewards and mobile payments provider. Pine Labs also offers a prepaid card issuing platform. Pine Labs reportedly has a 10% market share of the Indian in-store POS channel.

Mastercard invested in Pine Labs in January 2020 in a bid to expand multi-channel installment financing as a retail payment option, in addition to cards. The investment followed a June 2018 investment in Pine Labs by PayPal and Temasek; the 2018 investment valued the company at $1 billion. In addition to these three investors, Pine Labs considers Sequoia Capital India and Actis Capital as its main investors. Flipkart, the major Indian e-commerce merchant, invested in Pine Labs in 2017, just months before Flipkart was acquired by Walmart.

Pine Labs has raised over $423 million, over eight rounds since 2009 from a total of 15 different investors based on data from Crunchbase, a website that tracks investments in private companies.

Buy now/pay later services have become increasingly common across global markets as an important financial tool to enable sales, often to people who lack the necessary credit. A PaymentsSource study released in March, titled “Fintechs pounce while banks sit out,” revealed that almost half of buy now/pay later customers would not have made a recent purchase had they not had the option to make payments in installments.

“Pine Labs has rapidly transformed from a single product company offering retail acceptance of payments to a broader payments platform,” Shailendra Singh, managing director at Sequoia Capital, said in the release. “The company now serves hundreds of thousands of merchants for payments through cards and UPI, processing tens of billions of payment volume. In addition, their market leading Pay Later product sees $3 billion in annualized EMI transactions. Through the acquisitions of QwikCilver and Fave, Pine Labs is now the number one prepaid-issuing platform as well as the top consumer loyalty product in this market.”