▼ Summary
– Pine Labs is going public at a valuation of about $2.9 billion, which is approximately 40% lower than its last private valuation of over $5 billion in 2022.
– The company has reduced its primary offering by 20% and cut its offer for sale by 44%, with existing investors like Peak XV Partners and PayPal selling part of their holdings.
– Pine Labs has evolved from point-of-sale terminals to a broader fintech platform, with 70% of revenue from digital infrastructure and 30% from issuing and acquiring businesses.
– The firm operates in 20 countries and plans to expand globally, with international revenue growing nearly 58% between FY2023 and FY2025.
– Pine Labs turned profitable in the June quarter with a net profit of about $540,000 and a 17.9% year-over-year revenue increase to around $69 million.
Pine Labs, a prominent Indian fintech company with backing from major players like PayPal and Mastercard, is moving forward with its initial public offering this week, though at a notably reduced valuation compared to its previous private funding rounds. The company is proceeding with its IPO at a valuation roughly 40% lower than its last private round, even as it aggressively pursues international expansion for its financial technology platform.
Based in Gurugram, Pine Labs has established a price range for its shares between ₹210 and ₹221 each, which translates to about $2.00 to $2.50 per share. At the higher end of this spectrum, the firm’s market capitalization reaches approximately ₹254 billion, or around $2.9 billion. This figure marks a substantial drop from the over $5 billion valuation it achieved during a private funding event in 2022.
In addition to the lowered valuation, Pine Labs has scaled back its primary fundraising target by 20%, reducing it to ₹20.8 billion (about $234 million) from the ₹26 billion outlined in its initial draft prospectus last June. The number of shares available in the offer for sale has also been cut significantly, down 44% to 82.3 million shares from the originally planned 148 million.
Several existing investors, including Peak XV Partners, Temasek Holdings, PayPal, and Mastercard, are participating in the offering by selling portions of their current holdings.
Amrish Rau, CEO of Pine Labs, explained during a recent press conference that key investors decided to hold on to larger portions of their stakes, leading to the smaller offer for sale. He emphasized the importance of building positive sentiment around the IPO, stating that the company aimed to secure broad support with its pricing strategy. Rau highlighted that a successful public listing requires collective effort, much like “it takes a village” to bring everything together.
Originally established in 1998, Pine Labs began by installing point-of-sale systems for retail businesses. Over time, the company has broadened its services well beyond basic payment processing. It now supports bill payments through platforms such as Amazon Pay and CRED, and enables account-aggregator-based transactions as part of a wider portfolio covering payments, transactions, and acquiring services.
According to Rau, approximately 70% of the company’s revenue currently comes from its digital infrastructure and transaction services, with the remaining 30% generated by issuing and acquiring operations.
Pine Labs stands out as one of the few Indian startups already serving an international client base, and it aims to further grow its global footprint following its stock market debut. This strategy aligns with the Indian government’s objective of fostering globally competitive fintech enterprises. The company is also part of a growing trend among tech firms that have relocated their headquarters to India, seeking better access to the country’s vast pool of retail investors and closer alignment with domestic regulatory requirements.
The firm currently supports more than 980,000 merchants, 716 consumer brands, and 177 financial institutions. It has processed over 6 billion transactions with a cumulative value exceeding ₹11.4 trillion, equivalent to about $128 billion. Its operations span 20 countries, including markets in Malaysia, Singapore, Australia, Africa, the United Arab Emirates, and the United States.
Between fiscal years 2023 and 2025, Pine Labs reported that its international revenue grew by nearly 58%.
Rau expressed strong confidence in the company’s unique position, noting that the fintech innovations developed in India are unmatched elsewhere. He pointed out that Pine Labs has the opportunity to leverage its proprietary technology and expertise on a global scale. The company believes its fintech solutions are highly sought after in international markets, which explains its growing client base outside India.
In its domestic market, Pine Labs faces competition from firms such as Razorpay, Paytm, and Walmart’s PhonePe. The company achieved profitability in the quarter ending June, reporting a net profit of ₹47.86 million (approximately $540,000), a significant improvement over the loss of ₹278.89 million recorded during the same period the previous year. Operational revenue for the quarter increased by 17.9% year-over-year to ₹6.16 billion (around $69 million). Overseas business contributed about 15% of total revenue, amounting to ₹943.25 million (roughly $11 million), up from ₹795.97 million a year earlier.
The public listing of Pine Labs occurs amid a surge of Indian technology companies preparing to go public. Other notable firms expected to launch their own offerings this year include Groww, Lenskart, Shadowfax, Meesho, and BoAt.
(Source: TechCrunch)
