Fintech firm Pine Labs' FY23 revenue nears Rs 1,600 crore; Cuts losses by Rs 32Cr

Pine Labs, a merchant commerce and payments platform, has reported a significant increase in its operating revenue, reaching Rs 1,588 crore in FY23. This marks a substantial rise from Rs 1,017 crore in FY22, representing a 56.15% growth.

The company, backed by Peak XV Partners, has more than doubled its operating scale in the last two fiscal years, having reported Rs 726 crore in revenue in FY21.

Reduction in losses

Despite the challenges, Pine Labs managed to reduce its losses to Rs 227 crore in FY23, down from Rs 259 crore a year earlier. This 12.3% decrease in losses is a notable improvement in the company's financial health. The consolidated financial statements filed in Singapore reflect this positive trend.

Core business segments driving growth

The growth in revenue was primarily driven by Pine Labs' three core business segments: digital payments, issuing, and consumer applications.

The digital payments segment, which includes platforms like Pinelabs, Qfix, Mosambee, Benow, and Setu, saw a 75.1% increase in revenue to Rs 1,077 crore in FY23. The issuing segment, focused on prepaid cards, grew by 32% to Rs 445 crore. Additionally, the consumer applications segment contributed Rs 66 crore during FY23.

Geographic revenue distribution

A significant portion of Pine Labs' revenue comes from India, accounting for 91% of the total operating income. Singapore contributed 4% to the revenue in FY23. The company also recorded a non-operating income of Rs 166 crore, which includes interest on deposits and gains on mutual funds & investments.

Expenditure and financial health

Employee benefit costs constituted 45% of Pine Labs' overall expenditure, reaching Rs 895 crore in FY23. The total expenditure rose by 44.49% to Rs 1,981 crore due to various costs, including transaction and data center expenses, legal fees, advertising, depreciation, impairments, and other overheads.

Despite the rise in expenses, the company's Return on Capital Employed (ROCE) stood at -4%, and its EBITDA margin was at 8%. On a unit level, Pine Labs spent Rs 1.25 to earn a rupee in FY23.

Innovations and future prospects

Pine Labs has been at the forefront of the digital payments revolution in India, offering innovative payment solutions for omnichannel needs. The company recently launched Mini, a cost-effective QR and card acceptance device, targeting small and medium enterprises (SMEs) to boost digital payments adoption.

Navnit Nakra, Chief Revenue Officer at Pine Labs, emphasized the importance of fast checkout experiences and the elimination of cost barriers in point-of-sale digitization.

The company also announced the acceptance of the digital rupee on its PoS terminals in partnership with ICICI Bank, further cementing its position in the evolving digital payments landscape.

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