Mastercard and Pine Labs on Friday confirmed an investment by the US payments and technology giant into the home-grown fintech company, two days after ET reported citing sources that Mastercard had emerged as a strong contender to invest in India’s largest point-of-sale solutions provider as part of a $300 million financing round.
Mastercard and Pine Labs published statements on their respective websites confirming the investment without however disclosing the terms of the transaction.
They said the deal was “part of a partnership to continue the rapid growth of convenient electronic payment options for consumers across the region.”
“Together, the companies will offer a suite of value-added services, including Pine Labs’ end-to-end stored value solutions which will replace the paper ones now widely used by companies, retailers and people in South Asia and many other markets,” according to the statement.
The transaction is expected to value the Singapore and Noida-based Pine Labs at $1.5-$1.7 billion and will involve a mix of primary and secondary shares, giving Mastercard a firm footing in the fast-growing merchant acquiring segment.
As part of the deal, venture capital fund Sequoia Capital, the largest stakeholder, will make a partial exit as Pine Labs vaults into the unicorn club of privately held tech firms with valuations of $1 billion or more.
Sequoia has been invested in Pine Labs since 2009 and holds an estimated 68% stake. It could offload 15-25% to the incoming investor, sources had told ET.
“This relationship is a great validation of the top-quality products that Pine Labs delivers to merchants,” Lokvir Kapoor, founder and chairman of Pine Labs, said in the statement on Friday.
“Together, we have a unique opportunity to use Mastercard’s global presence and technology infrastructure to enhance our growth and enable us to meet the growing needs of customers in India and beyond,” he said.
According to the company, Pine Labs processes payments of $30 billion per year and serves some 140,000 merchants across about 450,000 network points, across India, Southeast Asia and in the Middle East.
“By joining forces with Pine Labs, we are reinforcing our strategy to deliver choice to consumers and to be the partner of choice for our customers in South Asia and around the world,” Ari Sarker, co-president for Asia Pacific at Mastercard, said.
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