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Friday, April 12, 2024

Fintech startup Setu bought by Pine Labs in $70M deal

Fintech infrastructure startup Setu has been bought by Pine Labs. The company plans to retain its brand and team and continue to operate independently.

In its third acquisition deal this year, Pine Labs has bought Setu, a fintech infrastructure firm, for around $70 million. Setu’s co-founder Sahil Kini said, the company plans to retain its brand and team and continue to operate independently.

In April, the Singapore-based business acquired a majority investment in payments solution provider Mosambee, and in February, it acquired a stake in Mumbai-based online payments startup Qfix.

Setu, a fintech infrastructure startup, has expanded its products to include payments, data, investments, and lending via its automated programming interface (APIs). The firm will work with Google Pay in August 2021 to offer fixed deposits through Equitas Small Finance Bank.

The company also maintains the open-source effort D91 Labs, which provides research and assists fintech startups in meeting regulatory standards.

In April 2020, Setu received around $18.5 million, including a $15 million Series A investment led by Falcon Edge and Lightspeed. During the round, the firm was valued at roughly $50 million.

Setu competes in the API infrastructure market with companies such as M2P Fintech, Signzy, and Decentro. While Setu has yet to publish its annual financial statement for FY22, it recorded operational revenue of Rs 3.31 crore in FY21, compared to zero in FY20.

Sahil Kini and Nikhil Kumar, the creators of Setu, have been members of India Stack for over six years.

The endeavor is a privately held collection of proprietary software apps and APIs that underpin the majority of Aadhaar applications as well as the Digital India program. Kumar previously co-founded Voyce, a customer feedback system for SMBs that was subsequently bought by Exotel, while Kini previously created Magnet Works, an industrial IoT business.

The acquisition comes as Pine Labs, a merchant commerce platform, expands its products beyond merchant payments. Apart from its Point of Sale (PoS) business, in which it provides merchants with card swipe terminals, Pine Labs also creates Buy Now Pay Later (BNPL), invoicing management, gifting solutions, and e-commerce solutions.

The company, which is now valued at $5 billion, is also considering an initial public offering (IPO) in the United States. According to media estimates, it would raise $500 million from the public market at a valuation of $6-7 billion.


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