American funds Baron Funds and Invesco hikes Pine Labs’ valuation

Two American funds, Baron Funds and Invesco, have reportedly revised their valuation estimations for Pine Labs, a digital payments startup focused on merchant services. 

As of December 2023, Baron Funds has increased the valuation of Pine Labs to $5.8 billion, up from $5.3 billion in September of the previous year. In contrast, Invesco has raised the valuation to $4.8 billion, regulatory filings with the US Securities and Exchange Commission showed.

How much do these two funds own?

Both Baron Funds and Invesco are minor but significant stakeholders in Pine Labs. Baron Funds holds approximately 1.3% of the company, while Invesco owns about 2.8%. Valuation adjustments follow various investment rounds, including a $150 million from Alpha Wave in 2022, which valued Pine Labs at $5 billion.

Pine Labs has also raised capital from other funds, with Baron Capital leading a $285 million round and Invesco investing $100 million in previous rounds.

How well is Pine Labs performing financially?

Despite the increase in valuation, Pine Labs has faced challenges in profitability. In the fiscal year 2023, the company reported a total revenue of Rs 1,588 crore (approximately $195 million), which represents a 56% increase.

However, the company's losses also increased by 12% to Rs 227 crore (approximately $28 million). 

Focused on expansion and IPO plans

Over the last four to five years, Pine Labs has significantly broadened its operational scope. Initially focused on card payments at large retail outlets, it now offers a variety of digital payment solutions, including online payments for e-commerce transactions and pay-later options at checkout.

The unicorn startup has also expanded through acquisitions, including Qwikcilver, Malaysian payment firm Fave, and PoS payments company Mosambee.

Notably, Pine Labs has been exploring the possibility of going public for several years. Recently, it has been reported that the company prepared to initiate an IPO in the U.S. and is considering moving its domicile back to India, possibly to capitalize on more favorable market conditions for tech companies.