July5 , 2022

It’s official: Pine Labs buys API infra startup Setu for $70-75 mn



New Delhi: Fintech unicorn Pine Labs has acquired fintech application programming interface (API) infrastructure startup Setu. The deal is worth around $70-75 million, Pine Labs CEO Amrish Rau said during a virtual press briefing on Thursday.

On 2 February, Mint was the first to report about this deal.

Headquartered in Bengaluru, Setu was launched by Sahil Kini and Nikhil Kumar in 2018. It offers open APIs across four categories—bills, savings, credit, and payments.

“Setu’s offerings including the interface for account aggregator, open network for digital commerce (ONDC), and open credit enablement network (OCEN) framework made Setu an attractive bet for us,” Rau added.

Setu employs around 90-100 people. As part of the deal, Setu’s founders will continue to lead the company independently and the team will be retained, the founders said.

Setu has raised $18.5 million in funding so far. In 2019, it had raised $3.5 million from Lightspeed India Partners and Bharat Inclusion Seed Fund. In 2020, it secured $15 million from Falcon Edge and existing investors.

In FY21, Setu reported operating revenue of 3.31 crore, up from 144 in 2019-20. It had earned 5.7 crore from interest on bank deposits. The losses for FY21 stood at 19 crore against 7 crore in the year-ago.

Last valued at $5 billion, Sequoia-led Pine Labs, which has plans to list on the US exchanges, has been looking to diversify beyond merchant payments. The Noida-based point-of-sale (PoS) major is investing to scale Plural, a new brand for online payment products; and is quite bullish on the lending side where it has built a strong EMI portfolio and also expanding its buy-now-pay-later business in India and Southeast Asia.

Setu is the third acquisition for Pine Labs in 2022. The Sequoia-backed company bought a majority stake in payments company Mosambee in April and Mumbai-based payments startup Qfix in February.

Amrish Rau is also an investor in Chennai-based M2P Fintech, which competes with Setu.

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