Pine Labs to acquire API infra startup Setu for over $70-75 million

• ByStartupStory     |    June 23, 2022

IPO-bound fintech unicorn Pine Labs announced today that it is buying Bengaluru-based Setu, an API (application programming interface) infrastructure finance business, for roughly $70-75 million (roughly Rs 550-580 crore). The Noida-based merchant transaction platform, Pine Labs, announced this purchase as its third this year. Around 90 to 100 Setu personnel will also be hired by Pine Labs as part of the transaction.

When Sahil Kini and Nikhil Kumar created Setu in 2018, they first started by providing open APIs for four categories: payments, bills, savings, and credit. Software programmes communicate with one another using APIs, which serve as a bridge. Setu, which means “bridge” in Hindi, provided a range of software solutions and APIs that fintech firms could use.

For a number of reasons, Setu will be a fantastic addition to the Pine Labs platform. According to B Amrish Rau, CEO of Pine Labs, “Embedded financial services and open banking are going to be the future, and the embedded finance market value is predicted to hit $138 billion by 2026 as APIs are strengthening the competitive fintech scene.”

“Setu was an appealing option for us because of its offerings, such as the interface for account aggregators, open network for digital commerce (ONDC), and open credit enablement network (OCEN) framework,” said Rau.

To date, $18.5 million has been raised for Setu. It received $3.5 million in funding in 2019 from Bharat Inclusion Seed Fund and Lightspeed India Partners. It received $15 million in 2020 from Falcon Edge and previous investors. Setu reported operating revenue of 3.31 crore in FY21, an increase from 144 in 2019–20. Interest on bank deposits had brought in 5.7 crores. Compared to the previous year, the losses for FY21 were 19 instead of 7 crores.

Sequoia-led Pine Labs, with a previous valuation of $5 billion and intentions to list on US exchanges, has been aiming to expand beyond merchant payments. The Noida-based point-of-sale (PoS) firm is making investments to scale Plural, a new brand for online payment products. It is also fairly optimistic about the loan sector, where it has built a strong EMI portfolio and is growing its buy-now-pay-later business in India and Southeast Asia.

Follow Startup Story