It’s official: Pine Labs buys API infra startup Setu for $70-75 mn

New Delhi: Fintech unicorn Pine Labs has acquired fintech Application Programming Interface (API) infrastructure startup Setu. The deal is worth about $70-75 million, Pine Labs CEO Amrish Rau said during a virtual news conference Thursday.

On February 2, Mint was the first to report on this deal.

Setu, headquartered in Bengaluru, was launched in 2018 by Sahil Kini and Nikhil Kumar. It offers open APIs in four categories: accounts, savings, credit, and payments.

“Setu’s offerings, including the account aggregator interface, open network for digital commerce (ONDC), and open credit enablement network (OCEN) framework, made Setu an attractive bet for us,” Rau added.

Setu employs about 90-100 people. As part of the deal, Setu’s founders will continue to run the company independently and retain the team, the founders said.

Setu has raised $18.5 million in funding to date. In 2019, it had raised $3.5 million from Lightspeed India Partners and Bharat Inclusion Seed Fund. In 2020, it received $15 million from Falcon Edge and existing investors.

In FY21, Setu reported operating income of 3.31 crore, up from 144 in 2019-20. It deserved 5.7 crore of interest on bank deposits. Losses for FY21 were 19 crore against 7 crore in the year ago.

Sequoia-led Pine Labs, valued at $5 billion, has plans to list on U.S. exchanges and is looking to diversify beyond payments to merchants. The Noida-based point-of-sale (PoS) major is investing to scale up Plural, a new online payment product brand; and is quite optimistic on the credit side, where it has built a strong EMI portfolio and has also expanded its buy-now-pay-later business in India and South East Asia.

Setu is Pine Labs’ third acquisition in 2022. The Sequoia-backed company bought a majority stake in payment company Mosambee in April and Mumbai-based payment startup Qfix in February.

Amrish Rau is also an investor in Chennai M2P Fintech, which competes with Setu.

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