April 13, 2022

IPO-bound Pine Labs acquires majority stake in payment solutions firm Mosambee

Initial public offering (IPO)-bound merchant commerce platform Pine Labs, on Wednesday, said it has acquired a majority stake in payment solutions firm Mosambee for an undisclosed sum.
The investment by Pine Labs will value Mosambee at upwards of $100 million, the statement said.
VCCircle exclusively reported the development on April 5th.
Mosambee, which is operated by Synergistic Financial Networks Pvt. Ltd, had earlier hired mid-market-focused boutique investment bank DC Advisory to scout for potential investors. The company counts Rajasthan Venture Capital Fund (RVCF) and SIDBI Venture Capital Ltd among its existing investors.
Post this transaction the leadership team at Mosambee will continue to operate independently.
“Ever since its founding, Mosambee has made tremendous inroads into elevating the merchant experience through cutting-edge fintech solutions. They were a natural fit for us due to our shared purpose of making innovative fintech products accessible to all and driving forward the digital payment revolution in India," Amrish Rau, CEO of Pine Labs, said.
In February, Mosambee acquired buy-now-pay-later (BNPL)-focused payment startup Benow to deepen its presence across the country. The company had then claimed its revenue has jumped from ₹2 crore to around ₹140 crore in four years. Amidst the pandemic, the payments company claimed it had registered 25% growth during the fiscal year 2021 and plans to further achieve 50% growth in FY22.
Mosambee is also planning to step up its efforts in building MSME-focused products to facilitate digital inclusion.
In 2015, Mosambee had raised an undisclosed amount in its Series B round of funding from existing investors Rajasthan Venture Capital Fund (RVCF) and SIDBI Venture Capital Ltd.
Sameer Chugh, co-founder of Mosambee added, “Pine Labs was our first partner when we launched our platform. Mosambee today caters to a wide array of businesses, from SMEs to private and government entities to leading banking institutions in India. With the extensive reach of Pine Labs and their portfolio companies, we aim to continue to deliver strong profitability and breakthrough solutions to our clients."
Pine Labs has been active in M&A (mergers and acquisitions), and it has struck a few acquisitions in the recent past. In February, it acquired out payments startup Qfix Infocomm for an undisclosed amount. Earlier, Mint reported that Pine Labs is in advanced negotiations to acquire API infrastructure company Setu.
Pine Labs previously acquired QwikCilver in 2019 for which it raised capital from Actis Advisors. In the past, the company acquired Southeast Asia-based fintech platform Fave for $45 million ( ₹337 crore) in April 2021.
In July 2020, Pine Labs also made a strategic investment in Fave.
The fintech unicorn (startups valued at over $1 billion) raised $50 million (around ₹380 crore) in fresh funding from Vitruvian Partners. The startup is said to have been valued at $5-$5.5 billion for the said transaction.
Last month, Pine Labs raised $150 million (about ₹1,120 crore) from Alpha Wave Ventures. In May 2021, the company raised a tranche of $285 million from a clutch of reputed public market-focused cross-over funds, pushing its valuation to around $3 billion. In August 2021, Pine Labs roped in CRED founder Kunal Shah on its board.
Earlier VCCircle reported that Pine Labs may defer the IPO process till later this year due to “weak market sentiments". It was planning to launch its Nasdaq listing process in January-February and had hired Goldman Sachs and Morgan Stanley to formalize the process.
The firm was launched in 1998 by Rajul Garg, but he left the firm in 2003. The company’s current chairman Lokvir Kapoor then took over the payments company. Pine Labs’ solutions are used by merchants from diverse sectors—electronics, food and beverage, fashion, pharmacy, telecom and airlines, but these are mostly offline players. The company is also planning to ramp up its online platform, both by organic and inorganic means.