Fintech Startup Pine Labs’ Valuation Gets a Boost from Baron Capital and Invesco

Pine Labs logo

Three points you will get to know in this article:

  • Baron Capital and Invesco increase Pine Labs’ valuation.
  • Pine Labs faced valuation reductions from investors last year.
  • Despite revenue growth, Pine Labs’ profitability remains stagnant.

Introduction to Pine Labs

Pine Labs is a fintech company that focuses on advancing merchant commerce in Asia. It was founded in 1998 and has since evolved from mainstream payment solutions to developing a unified point-of-sale platform, offering a comprehensive suite of merchant services including payments, risk assessment, analytics, lending, and more. The company’s vision is to build the best commerce and fintech platform from Asia for the world, and its mission is to enrich the world through the power of digital commerce and financial services. Pine Labs entered the Malaysian market in 2017 and has been expanding globally, aiming to become one of the world’s leading fintech platforms.

Investment Firms' Valuation Updates for Pine Labs

Two investment firms from the United States, Baron Capital and Invesco, have increased the estimated worth of their investments in the exciting fintech company Pine Labs. According to official reports obtained by our team, Baron Capital raised the value of Pine Labs to $5.8 billion by the end of December 2023, up from $5.3 billion in September 2023, marking a solid 9.4% increase. Likewise, Invesco saw a significant boost in the value of its investments in Pine Labs, jumping over 23% to $4.8 billion as of December last year, compared to $3.9 billion in October 2023.

Last year, Pine Labs experienced several reductions in its valuation by its investors. Baron Capital reduced the fintech company’s value by 5% at the end of March 2023, while Invesco adjusted Pine Labs’ valuation to $3.9 billion in October of the same year. Additionally, US-based investor Fidelity lowered the value of its stake in Pine Labs to $3 billion in October 2023 from $4.7 billion in August 2023.

Impact of Valuation Cuts on Indian Equities

Last year, Baron Capital observed a significant decrease in valuations for its Indian equities, marking two consecutive quarters of underperformance and a reset in valuation during the latter half of FY23. This trend of valuation cuts was primarily linked to the challenging funding climate and the increasing losses experienced by Indian unicorns, which had garnered investor attention at the start of the year. As investors prioritized profitability and long-term viability, domestic tech startups implemented significant measures, such as workforce reductions, to mitigate their financial losses.

Over the past year, Pine Labs has rolled out a range of fresh offerings tailored for small businesses and enterprises, boosting its revenue streams and retaining loyal clients. The company’s aggressive expansion efforts and acquisition spree have further fueled its customer base.

Operating Revenue Growth and Potential Relocation

Despite these advancements, profitability remains stagnant. The fintech unicorn witnessed a doubling of its net loss to INR 56.2 Cr in FY23, primarily due to a significant variance in deferred tax expenses. However, there was a notable upsurge in operating revenue, soaring by 37% to INR 1,280 Cr in FY23 compared to INR 932.3 Cr in FY22.

Founding and Core Offerings of Pine Labs

The company is also exploring the possibility of relocating its headquarters to India in preparation for a public listing. Established in 1998 by Lokvir Kapoor, Rajul Garg, and Tarun Upadhyay, Pine Labs offers financing and transaction technology to merchants using POS machines.

Pine Labs, a fintech company, witnessed fluctuating valuations by US investment firms Baron Capital, Invesco, and Fidelity in 2023. Despite valuation reductions, Pine Labs focused on strategic growth initiatives, introducing tailored offerings and expanding its customer base. While its profitability remained stagnant, the company experienced a significant increase in operating revenue. Pine Labs is considering relocating its headquarters to India for a potential public listing. Established in 1998, Pine Labs continues to provide financing and transaction technology to merchants using POS machines, showcasing resilience and adaptability in the competitive fintech landscape.

Neha Kamath

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