setu acquisition: Digital payments provider Pine Labs acquires API infra firm Setu for $70-75 million


Digital payments service provider Pine Labs has acquired application programming interface (API)-based infrastructure company Setu in a cash-and-equity deal in the range of $70-75 million.

While Pine Labs chief executive officer (CEO) Amrish Rau did point out the significance of the deal, he refused to comment on the final deal size.

ET had reported on February 2 that Pine Labs was considering acquiring Setu in a cash-and-equity deal in the range of $70-100 million.

Post the acquisition, Setu will work independently and retain its brand entity and continue to serve its existing merchants and Pine Labs will enter into embedded finance, and gain access to Setu’s API infrastructure stack to extend newer services for its online merchant partners.

In October 2021, Pine Labs announced its
foray into the payment gateway segment for online merchants and new age direct-to-consumer (D2C) brands with the launch of Plural. Plural, which provides payment services to merchants, has already clocked Rs 2,000 crore in payment processing value since its launch.

Rau believes Pine Labs can provide

such as identity management and embedded fixed deposits, and allow merchants to release a line of credit to their merchants with this acquisition.

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“Payment transactions are becoming more and more embedded. In the future, data and identity will be frictionless. That is where Setu has done some tremendous work. If we can provide embedded finance and deliver open API infrastructure to our merchants, the combination between Setu and Plural will be important,” said Rau.

Founded in 2018 by Sahil Kini and Nikhil Kumar, Setu provides API infrastructure that allows banks and other financial institutions to launch financial services on its platform. It also allows companies to break through conventional modes of loan assessment such as SMS readings, screen scrapings, and file uploads.

“We believe democratization of technology will yield better results in making financial products accessible to all. Therefore, we have our APIs open for the developer community. Pine Labs’ network of merchants and issuers coupled with our API integration prowess will help achieve great results in managing personal finance, monitoring loans to predict default rates, and credit underwriting, among others,” said Setu’s cofounder and CEO Sahil Kini.

Earlier this year, Pine Labs
acquired Mumbai-based online payments startup Qfix Infocomm. Last year, it had bought Kuala Lumpur-based payments and discovery platform
Fave in a $45-million all-cash deal.

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