Nearly as old as Google, Pine Labs is betting on these two segments to make it worth $6 billion

• The 23-year old Pine Labs is betting on ‘buy now, pay later’, or BNPL, as well as its new acquisition of Fave, for future growth.
• These strategic pivots are being put under spotlight before an impending initial public offering (IPO) in the US where Pine Labs is reportedly hoping to bag a $6 billion valuation.
• For now, the company seems to be pursuing growth on the topline, and is less worried about the size of the profit.

The 23-year old Pine Labs is nearly as old as Google but the Noida-based firm has traditionally been a payments processing platform for merchants. Now, it’s decided to go big on ‘buy now, pay later’, or BNPL, as well as its new acquisition of Fave, which connects merchants and consumers for payments and rewards.

These strategic pivots are being put under spotlight before an impending initial public offering (IPO) in the US where Pine Labs is reportedly hoping to bag a $6 billion valuation. This is not the first time Pine Labs is pivoting its business model. Between 2012 and 2017, it focused extensively on shifting from a traditional point-of-sale (PoS) to digital PoS, but a lot has changed since then as explained in the table below.

Pine Labs: Over the years

1998	Smart card-based payment and loyalty solutions for the retail petroleum industry.
2009-2012	PoS machines, loyalty programmes for merchants
2012-2017	Smart, cloud-based unified point-of-sale platform, integrated billing solutions, loyalty and rewards management
Today	Enabled PoS terminals to process all forms of digital payments. Contactless payment solution for near-field communication (NFC)-enabled smartphones. Expansion into Southeast Asia and Middle East. For customers - PayLater -- BNPL solution Loyalty Programmes Prepaid issuance Digital gift card solutions via Qwikcilver. For merchants - Working capital loans Utility app integrations from good and services tax (GST) compliance to inventory management Analytics to record sales, inventory, orders, the average customer spends and potential credit requirements

Source: Company website

The share of BNPL as part of the company’s total transactions by value has already crossed the 15% mark, and will grow further as it becomes its mainstay, said Kush Mehra, chief business officer at Pine Labs, in an exclusive interaction with Business Insider India. The margin from payments as a category has been shrinking for all players and Pine Labs wants to shore it up as it prepares to go public.

“For us, it (BNPL) is a crown jewel of Pine Labs,” said Mehra. “BNPL would become one of the most dominant, significant business drivers for us, and it already is,” he said.

The jury is out on the other big bet i.e., adding retail customers via Fave because the acquisition happened only in April. “The first step towards our journey to really build out the B2C [business-to-consumer] story is on the back of our partnership with Fave. We've just done a quick pilot launch in India,” said Mehra.

Through Fave, the company looks to start by offering discounts and gift coupons on making payments at merchant outlets, and then gradually expand its offerings to retail customers.

But the focus of the company, he said, would be to continue building merchant-centric solutions and scaling them up. “At the same time, all these new areas that we have started focusing on and we just spoke about the B2C story, would also become very significant contributors in our success in the near future,” he said.

Pine Labs turned profitable in the financial year ending March 2017, but swung back to losses for three consecutive years up to 2020. The financial figures for fiscal 2021 were not publicly available.

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