Indian merchant commerce platform Pine Labs to buy API startup Setu for $75m

Stockphoto via MBT

Merchant commerce platform Pine Labs said it is buying API fintech startup Setu for $70-75 million, as it expands its offerings beyond merchant payments.

This is Pine Labs’ third acquisition in 2022. It picked up a majority stake in payments solution provider Mosambee in April and Mumbai-based online payments startup Qfix in February.

Apart from point-of-sales (PoS) business, Pine Labs also offers Buy Now Pay Later (BNPL), invoice management, gifting solution and e-commerce enablement solutions to merchants.

In March, the company had raised $50 million in funding from Vitruvian Partners, a London-headquartered international investment firm, just a month after raising $150 million from Alpha Wave Ventures.

Headquartered in Bengaluru, Setu was launched by Sahil Kini and Nikhil Kumar in 2018.

“Setu will make an incredible addition to the Pine Labs platform for a few reasons. 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,” Pine Labs CEOB Amrish Rau said in a statement.

Setu’s offerings include an interface for account aggregator, open network for digital commerce (ONDC) and open credit enablement network (OCEN) frame. It competes with the likes of M2P Fintech, Signzy and Decentro in the API infrastructure business.

While Setu is yet to file its annual financial statement for FY22, the company reported operating revenues of Rs 3.31 crore in FY21, which were zero during FY20.

Currently valued at $5 billion, Pine Labs is also contemplating raising $500 million in an initial public offering (IPO) in the US at a valuation of $6-7 billion, according to media reports.

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