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The ₹48,000 Crore Payment Giant You Never Heard Of!
From point-of-sale solutions to a multi-billion-dollar business! Pine Labs story.
Abhishek Yadav
February 08, 2025 • Estimated Reading Time: 13 minutes
In partnership with
Remember the Last Time You Paid at a Store?
Chances are, a Pine Labs device made that transaction possible—without you even realizing it. Whether you’re filling up at a petrol pump, shopping at a mall, or dining out, Pine Labs powers a massive chunk of India’s digital payments. This fintech powerhouse rakes in over ₹1,700 crores annually and is quietly becoming the backbone of India’s retail ecosystem.
Now, with an IPO on the horizon, Pine Labs is ready to make headlines. But how did this low-key giant build its empire?
Let’s dive into the story of how Pine Labs went from a small loyalty card solutions provider to becoming India’s payment king.
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Table of Contents
How It Started
Pine Labs began its journey in 1998, founded by Lokvir Kapoor, Rajul Garg, and Tarun Upadhyay—three young students from IIT Kanpur. Their initial focus wasn’t on mainstream payments but on solving a specific problem in the retail petroleum sector. At the time, cash was still king, and retailers struggled with clunky systems that slowed transactions and exposed them to security risks.
Source: https://www.youtube.com/watch?v=tSaG_aT6C8Y (GrowthX)
The solution? A smart card-based payment and loyalty program, designed to simplify and speed up payments while rewarding customers for their loyalty. This idea helped fuel stations streamline operations, reduce costs, and integrate real-time data for better decision-making.
The early years weren’t glamorous. The founders bootstrapped the company, working out of a tiny office in Noida. But their persistence paid off. By 2003, Pine Labs had launched its first PoS device, allowing merchants to process credit and debit card payments. That pivotal move in 2004 took them beyond the petroleum sector and into mainstream payments and financial offerings for merchants.
It was only the beginning of a journey that would revolutionize how India does business.
Growth Trajectory: From Smart Cards to a Fintech Giant
Pine Labs’ journey is a textbook example of how a company can evolve and adapt to market changes, not just to survive but to dominate an industry. What started as a smart card-based payments solution provider in 1998 has grown into a full-fledged fintech powerhouse, operating at the forefront of digital payments and merchant services. Pine Labs' growth can be categorized into several significant phases, each showcasing its resilience, adaptability, and visionary leadership.
1998–2004: The Foundation Years
As previously mentioned, in this period, Pine Labs worked behind the scenes for large retailers, helping them set up closed-loop prepaid card systems and loyalty solutions. While this business model ensured stable growth, it was relatively niche and lacked the scalability required to become a major player in the payments ecosystem.
The early 2000s, however, marked the rise of debit and credit card usage in India. Pine Labs realized the need to pivot towards a more open-loop system that would cater to a broader base of merchants. This shift laid the foundation for the next phase of its growth.
2005–2010: Entering the POS Business
The mid-2000s were pivotal. Pine Labs recognized the massive potential of point-of-sale (POS) systems, which were slowly becoming an essential tool for merchants looking to offer cashless payment options. With a strategic focus on POS solutions, Pine Labs began integrating payment acceptance, merchant analytics, and loyalty program management into a single device.
Unlike traditional POS systems that simply processed payments, Pine Labs’ offering was more comprehensive. It helped merchants accept payments while also providing data insights on sales trends, inventory management, and customer behavior. This differentiated approach helped Pine Labs quickly establish a stronghold in the POS market.
By 2010, Pine Labs had not only expanded its customer base significantly but had also built a robust network of merchants across India.
2011–2016: Scaling Up and Diversifying Services
As India’s digital payments ecosystem gained momentum, Pine Labs continued to innovate and expand its service offerings. The focus shifted from being a pure POS player to becoming a broader merchant commerce platform.
During this phase, Pine Labs introduced:
EMI Solutions at the Point of Sale: Enabling merchants to offer no-cost EMI options to consumers at the point of purchase. This was a game-changer in India’s retail ecosystem, making big-ticket items more accessible to the middle class.
Loyalty and Gift Card Solutions: Leveraging its early expertise in smart cards, Pine Labs launched comprehensive loyalty and gift card programs for merchants, helping them engage with customers better.
Multi-payment Acceptance: Pine Labs’ POS systems started accepting multiple payment methods—debit and credit cards, wallets, and later UPI—ensuring merchants could cater to diverse consumer preferences.
This period also marked the beginning of Pine Labs' international expansion. The company entered Southeast Asia, starting with Malaysia, to replicate its success in a new market.
By 2016, Pine Labs had transformed into a versatile merchant platform with a growing reputation not just in India but across Asia.
The Rise of a Fintech Leader
This was the phase where Pine Labs truly emerged as a fintech giant. Riding the wave of India’s digital revolution—fueled by government initiatives like Digital India and the demonetization of 2016—the company capitalized on the rapid adoption of digital payments.
Key Developments
Funding and Global Expansion:
In 2018, Pine Labs raised $82 million from investors like Sequoia Capital and PayPal. This marked the beginning of its aggressive expansion strategy. The company not only enhanced its presence in India but also accelerated its push into Southeast Asia and the Middle East.
Strategic Diversification and Expansion: Since Amrish Rau’s appointment as CEO in March 2020, Pine Labs has aggressively diversified its offerings beyond its flagship POS terminals. The company has embraced adjacent solutions like card-based payments, QR codes, e-commerce, and UPI, transforming itself into a merchant commerce platform.
Key acquisitions that have fueled this growth:
Fave (2021): A consumer payments and savings platform in Southeast Asia
Setu (2021): An API infrastructure company to bolster its digital payments business
Mosambee (2022): Enhanced its buy-now, pay-later (BNPL) suite
Pine Labs also expanded its online businesses under brands like Plural (payment gateway), Setu (digital payments), and Qfix (smart invoicing and billing tools).
It introduced Buy Now, Pay Later (BNPL) services at the POS, further strengthening its consumer finance solutions.
Partnerships and Ecosystem Growth: Pine Labs formed strategic partnerships with banks, NBFCs (non-banking financial companies), and brands to offer integrated services to merchants and consumers. For example, collaborations with leading banks allowed merchants to offer instant credit options to consumers directly at checkout.
The company’s focus on creating a merchant-centric ecosystem that combined payments, credit, and loyalty services became its unique selling proposition (USP).
Business Model Breakdown
Pine Labs operates on a B2B model, targeting merchants and offering them a seamless payment ecosystem. Here’s a closer look at its business model:
1. Point-of-Sale Solutions: Pine Labs provides advanced PoS terminals that support multiple payment methods—from credit/debit cards and UPI to wallets and BNPL options.
2. Merchant Lending: Merchants using Pine Labs’ services can access short-term credit, helping them manage cash flow and grow their businesses. The company partners with financial institutions to offer customized lending solutions.
3. Gift Cards and Prepaid Solutions: Pine Labs is a market leader in the gift card segment, managing programs for some of India’s largest brands. This segment has become a significant revenue generator for the company.
4. Buy Now, Pay Later (BNPL): Recognizing the growing demand for flexible payment options, Pine Labs entered the BNPL space, partnering with top brands and lenders to offer consumers interest-free EMIs at the point of purchase.
Challenges and How They Tackled Them
Like any successful company, Pine Labs faced its share of challenges:
Competition: With the rise of players like Paytm, Razorpay, and BharatPe, the payments space became increasingly crowded. Pine Labs responded by diversifying its offerings and focusing on high-margin services like BNPL and merchant lending.
Regulatory Hurdles: Navigating India’s evolving fintech regulations required constant adaptation. Pine Labs invested in compliance and worked closely with regulators to stay ahead of changes.
Tech Scalability: As transaction volumes grew, ensuring the scalability and security of its platform became critical. Pine Labs invested heavily in cloud infrastructure and cybersecurity.
Revenue and Financial Performance
In FY24, Pine Labs reported impressive numbers, with its revenue rising by nearly 10% to ₹1,745 crore ($208 million). Despite a net loss of ₹339 crore ($40.4 million), the company managed to maintain strong financial discipline. It recorded an operating free cash flow of ₹5.56 crore ($6.6 million) and ₹5.9 crore ($7.1 million) in the third and fourth quarters of FY24, respectively. By the end of March 2024, Pine Labs held a cash balance of ₹1,026 crore ($122 million).
The company’s gross transaction value (GTV) for internal markets hit ₹85,800 crore ($10.6 billion) in FY24. Adjusted EBITDA stood at ₹163 crore ($19.4 million), with core EBITDA at ₹286 crore ($34 million), covering its payments and fee-based business segments.
Key Partnerships and Top-Level Changes
Pine Labs strengthened its banking and NBFC partnerships with leading players such as State Bank of India, Standard Chartered, Axis Bank, Bajaj Finserv, and Mahindra Finance.
Recent leadership changes include the promotion of Sumit Chopra to COO—India, Digital Payments and the resignation of Navnit Nakra, Pine Labs' CFO and former India CEO of OnePlus.
International Expansion and IPO Plans
The international push is already well underway, with Qwikcilver, Pine Labs’ issuing business, operating in 12 countries, particularly in the Middle East and Southeast Asia. Its SNPL technology (Simple Buy Now, Pay Later) has gained traction in partnership with Mastercard.
Pine Labs is also preparing for a highly anticipated initial public offering (IPO), targeting a $1 billion raise at a valuation between $6 billion and $7.4 billion. After missing its 2023 IPO target, the company is now poised to move forward, with fresh investor interest from mutual funds like Baron Funds, which valued the company at $5.8 billion.
To facilitate its IPO, Pine Labs secured its first set of approvals from India’s National Company Law Tribunal (NCLT) to merge its Singapore-based entities with its India unit, signaling the start of a new chapter in its journey.
This brings us to the end of the story of the giant that changed the Merchant Payment landscape in India. I hope you liked the case study. If you did, consider subscribing it with others who you think would find it useful and interesting. And if you haven’t subscribed to Think Tank yet, do it using the link below:
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