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State Bank of India, the country’s largest commercial bank, has taken its next major step in its ongoing digital transformation journey with an investment of $20 million in Pine Labs, an IPO-bound start-up focused on payments and is emerging as a leading merchant commerce platform.
This investment is in sync with the government’s recent push to PSBs to partner and align with new age fintechs as part of the development of digital ecosystem in the country.
SBI, which is among the largest retail banks in the world, is already a dominant player in the digital space. The bank had, last year, invested in banking technology start-up Cashfree.
Noida-based Pine Labs counts Sequoia Capital, Temasek Holdings, PayPal and Mastercard among its backers. It offers payments terminals, invoicing tools and working capital to over 2 lakh merchants across Asia and the Middle East.
Digital reinvention
In the recent years, SBI has been heavily investing in digital transformation with large initiatives like SBI YONO, SBI InTouch, SBI Buddy, CRM, optimisation and re-engineering of existing business processes in the branches, IT innovations such as voice mobile banking, chatbots, spend analyser and virtual cards.
When it set out on its digital drive, the three key aspirations were a digital bank for one-third of the nation, to become an online marketplace (with 75+ partners) for financial products of SBI Group and to provide end-to-end digitisation of processes to enhance customer experience.
The core elements of its digital proposition are digital bank, financial superstore, online marketplace and e2e digitisation.
YONO — which was launched as a unified integrated App in November 2017 — has already become one of the largest digital banks in the world.
Commenting on the new fund raise for Pine Labs, B Amrish Rau, CEO, Pine Labs, said, “We are thrilled to have the largest bank of India, the SBI, place its trust in us and welcome it in this journey where we are empowering merchants with seamless and secure payment experiences across offline and online platforms. In the last one year, several marquee investors have placed their trust in our business model and growth momentum and that is a gratifying feeling”.
Earlier in 2021, Pine Labs had raised a total round size of $600 million from a marquee set of new investors and followed it up with a $100-million fundraise in September 2021 from US-based Invesco Developing Markets Fund. After the September fund raise, Pine Labs was reportedly valued at $3.5 billion.
Expanding BNPL space
Pine Labs, which is looking to list in the US this year, is also expanding its Buy Now Pay Later (BNPL) business — which it entered in January 2021 — across India and South-East Asia. The company has entered the consumer payment space with its April 2021 acquisition of Fave, one of South-East Asia’s leading consumer fintech platform, and has a leading presence in the Gift, Prepaid and Stored Value segment through its 2019 acquisition of Qwikcilver.
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