Mastercard bets on payments solutions firm Pine Labs

By Narinder Kapur

  • 24 Jan 2020
Credit: Pixabay

Payment solutions provider Pine Labs Pvt. Ltd has raised funding from Mastercard Inc., marking the second reported bet the global technology payments giant has made on an Indian firm within six months.

Noida-based Pine Labs did not disclose the financial details of the deal.

A report in The Economic Times said Mastercard has agreed to invest in the company as part of a larger $300 million (approximately Rs 2,138.58 crore at current exchange rates) financing round.

New York-based Advent Capital was also expected to participate in the round, valuing Pine Labs at between $1.2-$1.5 billion, according to the report.

The latest acquisition will see companies offering value-added services including end-to-end stored value solutions, a variety of cards and real-time payments-based installment financing, Pine Labs said in a statement.

Pine Labs executive chairman Lokvir Kapoor said this is a unique opportunity to use Mastercard’s global presence and technology infrastructure to enhance the firm’s growth and enable it to meet the growing needs of customers in India and beyond.

The transaction also expected to see Sequoia Capital, the largest stakeholder in Pine Labs, to make a partial exit in the company by offloading between 15-25% stake to incoming investors, the report added, citing people with knowledge of the developments.

Sequoia has been looking to exit from its investment in the payment solutions provider for some time. In 2017, it was reported that the venture capital and growth-stage investment firm was exploring the sale of its stake in the company. It had invested around $1 million in Pine Labs in 2009.

Separately, Mastercard co-president for Asia Pacific Ari Sarker said the investment in Pine Labs was in line with its strategy of delivering choice to consumers and building innovative payment solutions for them.

In September last year, Mastercard invested in software-as-a-service company Syntizen Technologies Pvt. Ltd. The US-based company has also invested in payment gateway startup Razorpay and mobile payments technology ToneTag.

Pine Labs was founded in 1998 by Rajul Garg, who quit the company in 2003. The payments company was then taken over by Kapoor. Initially, it focused on large-scale smart card-based payment and loyalty solutions for Indian petro companies before shifting to its current business model.

In May 2018, Singapore state investment firm Temasek and American payments giant PayPal Holdings Inc. invested a total of $125 million (around Rs 843 crore) in Pine Labs. That infusion came after private equity firm Actis Capital led an $82 million (around Rs 530 crore) in the company in March that year.