Merchant commerce platform Pine Labs has acquired fintech infrastructure specialist Setu, in a deal valued somewhere between $70 million and $75 million, reports CNBC-TV18.
The acquisition will help Pine Labs strengthen its diversified online payments and lending portfolio, the report said citing sources close to the transaction.
Pin Labs will retain Setu's founder-managers and the 90-100 team of employees in order to seamlessly assimilate the business and the brand, the company said in a briefing.
Founded in 2018, Setu offers API (Application Programming Interface) integration for fintech players to work closely with regulated entities like banks, non-banking financial companies (NBFCs), and others. In August 2021, the company partnered with Google Pay to offer fixed deposits through Equitas Small Finance Bank.
“Embedded financial services and open banking are going to be the way forward and the embedded finance market value is expected to exceed $138 billion by 2026 as APIs are intensifying the competitive fintech landscape," said Amrish Rau, CEO, Pine Labs.
"Setu helps its customers, merchants, and brands build beautiful experiences, so consumers can engage with payments and financial services on their terms. We are in the golden phase of digitisation in India, and Setu is a pioneer in supporting innovation on the India stack — their work on UPI and in the account aggregator space," he added.
Callong Setu "a team of builders and entrepreneurs", Rau further said, the company, "together with the Pine Labs team, will tackle hard problems to solve in the ecosystem.”
This is the third acquisition by Pine Labs in 2022, which include acquisition of a majority stake in payments solution provider Mosambee in April and Mumbai-based online payments startup Qfix in February.
The deal comes at a time when Pine Labs is expanding its offerings beyond merchant payments. It is expanding its Buy Now Pay Later (BNPL) offering in Southeast Asia following the acquisition of consumer payments platform Fave in April 2021.
“Pine Labs’ network of merchants and issuers coupled with our API integration prowess will help achieve great results in personal finance management, monitoring loans to predict default rates, credit underwriting, and several other areas,” said Sahil Kini, co-founder and CEO, Setu.
Backed by Sequoia India and Mastercard, Pine Labs is said to have confidentially filed for a US listing, seeking to raise about $500 million, as per a Bloomberg report.