Merchant commerce platform Pine Labs makes its third acquisition; buys API Infra startup Setu

Noida-based merchant commerce platform Pine Labs has acquired Bengaluru-based API infrastructure startup Setu for an undisclosed amount. However, several media reports suggested the deal is worth around $70-75 million.

As part of this deal, Setu will continue to operate as an independent entity and continue to serve its existing merchants. The deal will enable Pine Labs will enter into embedded finance and gain access to Setu’s API infrastructure stack to extend newer services for its online merchant partners.

"Setu will make an incredible addition to the Pine Labs platform for a few reasons. Embedded financial services and open banking are going to be the way forward and the embedded finance market value is expected to exceed $138 bn by 2026 as APIs are intensifying the competitive fintech landscape," said B Amrish Rau, CEO of Pine Labs.

"Setu helps their customers, merchants, and brands build beautiful experiences, so consumers can engage with payments and financial services on their terms. We are in the golden phase of digitization in India, and Setu is a pioneer in supporting innovation on the India stack - their work on UPI and in the account aggregator space is moving the industry forward. Lastly, Setu is a team of builders and entrepreneurs, and together with the Pine Labs team will tackle hard problems to solve in the ecosystem. We are more than delighted to welcome the co-founders Nikhil and Sahil and their young and vibrant team to the Pine Labs family," B Amrish Rau adds.

Setu works with Account Aggregator partners which are non-banking financial companies operating under the NBFC-AA license from the Reserve Bank of India. the startup enables the consolidation of all financial data of users at a single location and allows users to access services quickly.

These Account Aggregators operate under the NITI Aayog's content-driven data-sharing framework called Data Empowerment and Protection Architecture (DEPA).

According to the company's statement, Setu has seen strong demand for its products - their APIs are being used across diverse industry verticals today including startups, retail enterprises, banks, insurance, and lending companies. 

Setu's existing and emerging use cases cut across multiple digital ecosystems, from Aadhaar eSign to BBPS bill payment, payment collection integration via WhatsApp, FASTag payment collection, and more.

"The kind of infra Setu is building will be very important for India in the years to come and I am happy that they are relentlessly moving towards that goal and this partnership with Pine Labs will help them to accelerate," Nandan Nilekani, Co-founder & Chairman of Infosys Technologies Limited.

"We believe democratization of technology will yield better results when it comes to making financial products accessible to all and therefore have our APIs open for the developer community. Pine Labs' network of merchants and issuers coupled with our API integration prowess will help achieve great results in personal finance management, monitoring loans to predict default rates, credit underwriting, and several other areas," said Sahil Kini, Co-founder & CEO at Setu.

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