Tencent, Naspers eye stake in SG payments solutions firm Pine Labs: Report

A sticker featuring the logo of Tencent Holdings Ltd. is seen during a news conference in Hong Kong, China, on Thursday, March 21, 2019. Photographer: Justin Chin/Bloomberg

Chinese internet giant Tencent and Naspers of South Africa are considering picking up a stake in Pine Labs, a payments solutions firm headquartered in Singapore, in a fundraising deal that could value the startup at about $1.5 billion, according to a Times of India report.

DealStreetAsia first reported in August that Pine Labs was in advanced talks to close its new funding round at a valuation of around $2 billion.

Sources quoted by Times of India said the company is looking at a valuation of $1.5 billion, which is nearly double the $800-million valuation when it raised capital last year.

Established in 1998, Pine Labs offers cloud-based point-of-sale payments solutions that enable merchants to accept credit and debit card payments, in addition to transactions using e-wallets, QR codes and India’s unified payments interface (UPI).

The report added that Naspers and its fintech unit PayU are considering a majority stake in Pine Labs, while Tencent and Caisse de depot et placement du Quebec (CDPQ), one of Canada’s largest pension funds, are looking at a minority stake.

The startup’s existing backers such as Temasek and PayPal are likely to participate in the current funding round. The company raised $125 million from Temasek and PayPal last May. Prior to that, Pine Labs had raised $82 million from private equity fund Actis and California-based investment company Altimeter Capital.

A large part of the funds raised in May was used to finance its $110-million acquisition of QwikCilver.

In July, Pine Labs has secured about $102 million in fresh infusion from its Singapore-headquartered parent Pine Labs Pte Ltd, per the company’s filings with the Registrar of Companies (RoC).

The proposed funding will help the Singapore firm facilitate its overseas expansion plans. The company, which works with global brands and merchants, is said to be aggressively looking to expand its operations in Asia in countries such as Thailand, Singapore, and Indonesia, Malaysia and UAE.

The additional capital will also help the company expand in the lending space.

The interest in Pine Labs comes as Asian venture capital firms have identified fintech as one of the four areas as the next growth frontiers in the region. The other three are blockchain, medtech, and B2B.

Singapore’s state investor Temasek Holdings also announced plans to invest in sectors such as fintech, B2B, and healthcare, as it scouts for Southeast Asia’s aspiring unicorns.