Venture capital firm Sequoia Capital is looking at considerably growing its investments in the cryptocurrency space globally. The firm’s Managing Director Shailendra Singh said that 40 to 50 percent of the deal pipeline being discussed internally is regarding crypto investments. In India, Sequoia is invested in the newest and only the second crypto unicorn – CoinSwitch.
Singh spoke at merchant platform Pine Labs’ annual event Pine Labs X.0, along with the company’s Chief Executive Officer Amrish Rau.
Payment companies like Paytm and PhonePe in India have been rapidly expanding to offer financial services like wealth management, mutual funds, insurance, Buy Now Pay Later (BNPL) etc. Singh sees this as an outcome of the increased trust that payments platforms have among users.
“Fintech has very high optionality because when you have payment systems, you have more than usual trust than any other form of business. Merchants, customers and bankers -- all trust you to manage their money,” he said.
The trust helps payments platforms to upsell and cross-sell other services to customers, according to Singh. Pine Labs too has Pay Later, loyalty and prepaid gift card products apart from its payments infrastructure.
“People underestimate the optionality that fintech offers. Take PayPal; over 20 years after PayPal was sold to eBay, I just read last week that they might be launching stock trading. I think to myself what took them 20 years?” he noted.
After the pandemic’s onset last year, customer behaviour changed drastically towards rapid digital adoption. For Sequoia, the digitisation of Small and Medium Enterprises (SMEs) is a theme to watch out for.
“The idea of SMEs adopting digitisation is a transformative trend and has benefitted many companies including Pine Labs. Plus, consumer behaviour has also changed in relation to mobile devices as they were forced to stay home,” Singh said.
“So on both, the merchant side and the demand side, I see an acceleration and we are seeing it manifest in ways which blow our mind all the time!”
Sequoia Capital invested in Pine Labs back in 2009 and is the largest shareholder with a 25.70 percent share, according to data by Fintrackr. In the latest funding round by Pine Labs, Sequoia is said to have received around $230 million through a partial exit, over and above the $455 million over the years.
In 2021, Pine Labs raised $600 billion at a valuation of $3 billion from Fidelity, Blackrock and other investors. This was followed by a $100 million fund infusion from US-based investment management company Invesco.
Currently, the payments company is planning its IPO and is eyeing a $6 billion valuation, according to a report. The company is also backed by other investors including Temasek Holdings, Actis, PayPal, and Mastercard Asia.