Pine Labs makes majority investment in Mosambee to address retail merchants

Pine Labs announced on April 13 that it had made a significant majority investment into Mosambee, a fast-growing end-to-end payment solution provider in India. This investment by the merchant commerce platform will now value Mosambee at upwards of $100 million.

Mosambee is a payments solution company, founded in 2012 by Alok Arora, Bhushan Thaker and Sameer Chugh. The company  offers a merchants solutions platform catering to offline and online merchants in India and six other countries and over a million Small and Medium Enterprises (SMEs) and government departments use its products,

In a conversation with Moneycontrol post the announcement, Amrish Rau, CEO of Pine Labs said that Mosambee and its team will continue to operate independently. The technology and infrastructure will also remain independent.

On the reason behind the acquisition, Rau said, "We are increasing our product stack at Pine Labs. However, I found a gap when it comes to the retail merchant categories. As we expand our product offering into commerce-related services, and also into financial services, these retail merchants can become a very relevant target segment. That is where Mosambee can plug the gap for us."

Rau did not disclose the exact amount of the acquisition or the stake bought be Pine Labs in Mosambee.

Pine Labs has an omnichannel approach, offering PoS solutions as well as an online payment gateway named Plural that it launched in October 2021. The company is expanding its BNPL offering in Southeast Asia.

This is Pine Labs' second investment in 2022, after it acquired Mumbai-based online payments startup Qfix Infocomm. The company is also at an advanced stage to acquire fintech infrastructure company Setu. In April 2021, Pine Labs also acquired Fave for $45 million to enter the consumer payments space.

On the company's acquisition strategy Rau said, "We will invest in any capabilities that allow us to build our core segments better and help us get into that fast. In some cases we will do it organically. and inorganically in others."

Mosambee on the other hand had announced the acquisition of Buy-Now-Pay-Later (BNPL) startup Benow in February 2022.

Sameer Chugh, Co-founder of Mosambee said in a statement, "Pine Labs was our first partner when we launched our platform. Mosambee today caters to a wide array of businesses, from SMEs to private and government entities to leading banking institutions in India. With the extensive reach of Pine Labs and their portfolio companies, we aim to continue to deliver strong profitability and breakthrough solutions to our clients."

Pine Labs, backed by Sequoia Capital, Temasek Holdings, Actis, PayPal, and Mastercard among other global investors, is reported to have filed confidentially for the IPO with the US Securities and Exchange Commission (SEC). Goldman Sachs and Morgan Stanley have been appointed as advisors for the float.

It recently received a $50 million investment from United Kingdom-headquartered investment firm Vitruvian Partners, bringing its valuation to $5.5 billion.

In January this year, Pine Labs also secured a $20 million investment from India’s largest lender State Bank of India (SBI). This was followed by a $150 million fundraise from Alpha Wave Global.

In 2021 alone, the company raked in a total of $900 million in investments. The first $258 million was raised in May 2021 from public market crossover investors including Baron Capital Group, Duro Capital, Marshall Wace, Moore Strategic Ventures and Ward Ferry Management.

In July 2021, the company raised $600 million at a valuation of $3 billion led by Fidelity, Blackrock and other investors.

In September 2021, the firm announced it had raised $100 million more from US-based investment management company Invesco. The investment was done through the Invesco Developing Markets Fund.