July 27, 2021

Pine Labs acquires Singapore’s Fave, plans to launch in India

Pine Labs aims to rollout the Fave app in India later this year across its 500,000 merchant network points in about 3,700 cities. 

By: Tricia Ang | 20 April 2021

Photo from Malay Mail

Last week, Noida based Pine Labs announced that it is acquiring Fave, one of Southeast Asia’s fastest growing fintech and e-commerce startups in a cash plus stock deal. 

Pine Labs announced in a press release that it would pay more than SGD 60 million (USD 45 million) to acquire the Singapore-based company. Fave’s investors will receive cash, while the company’s founders and key employees will receive both cash and Pine Labs stock. Sequoia Capital India, China-based SIG Asia Investments, and Indonesian venture capital firm Venturra Capital are among the company’s backers.

The acquisition is anticipated to help both companies accelerate their growth in the Asia region and unlock consumer opportunities across retail, food and beverage, fashion, and the consumer goods markets. 

The statement added: “Joining forces with Pine Labs will reinforce Fave’s market position in Southeast Asia.” Following the integration, Fave’s founders will have their roles expanded to lead the overall consumer platform for the enlarged Pine Labs group across Asia. 

Fave also expects to hire over 100 new staff in Southeast Asia and India in order to speed up cashless payments and smart savings across the region.

Fave said that it will “continue to introduce new smart payment features via the Fave platform, unlocking new ways to maximize joy and value in every shopping experience for consumers across Asia.” 

Malaysian Joel Neoh, the company’s current CEO, co-founded Fave in 2016. He originally launched Groupon Malaysia and left the US e-commerce marketplace group as Head of Asia-Pacific after just over four years. Fave rapidly grew in Southeast Asia after its founding, acquiring Groupon’s Singapore, Malaysia, and Indonesia units between 2016 and 2017. Fave currently operates in  35 cities across these three countries.

Fave now serves over six million customers across Southeast Asia and works with over 40,000 retail partners. Its app supports ecommerce, including offering digital discount vouchers to its users, in addition to being an e-payment platform.

Pine Labs is an Indian merchant network company that offers financing and last-mile retail transaction technology. It is privately valued at over USD one billion. It started as a provider of smart card-based payment and loyalty solutions for the retail petroleum industry in 1998. It has developed into mainstream payments over time, providing merchants with solutions and connecting them to banks and financial services.

They were one of the first companies to use smart, cloud-based unified point-of-sales platforms. Its customers include some 70,000 retailers across India including major retail outlets such as Mark’s and Spencer’s Retail, Pantaloons, Shoppers Stop and Westside. It also has presence in Malaysia and Dubai. 

Over 100 million retail customers used Pine Labs’ platforms to process over 550 million transactions annually, according to the company. Pharmacies, fashion stores, and airlines are among its merchants. Its platforms are backed by 15 major banks and seven financial institutions. Between October 2020 and March 2021, Pine Labs saw a 171% increase in transactions on its website.

Lone Pine Capital, PayPal, Singapore government investment firm Temasek, UK-based Actis Capital, US investment firm Altimeter Capital, Belgium’s Sofina, and Sequoia Capital are among Pine Labs’ principal investors. The India ecommerce and digital wallet space has exploded in recent years, since the implementation of the Unified Payments Interface (UPI) in 2016. UPI enables direct connection with banks for money transfer.

There are more than ten sizable players with digital payment apps including Google Pay which claims to have 100 million users, Walmart’s PhonePe, Amazon Pay and PayTM which is a pioneer in this market but was eclipsed by PhonePe as the number one platform recently. 

Based on German market data firm Statista, in February 2021, there are a total of 2.3 billion digital payment transactions worth four trillion Indian rupees (about USD 54 billion), a 70 per cent year on year growth in transactions. Of the 2.3 billion transactions, PhonePe had a share of 42.5%, Google was at 36% and PayTM’s share at 15%. 

Pine Labs aims to launch the Fave app in India later this year across 500,000 merchant network points in approximately 3,700 cities. 

Commenting on the acquisition, B Amrish Rau, CEO, Pine Labs, said, “Consumers have tremendous choices in their payment types. They want to be sure that they save on every transaction. Fave helps consumers apply their best rewards, coupons, gift cards and cashbacks on all transactions in a seamless manner. Joel and the Fave team have built a loyal consumer base with their smooth checkout experience. We are excited to partner with them in this journey in South East Asia and India.” 

“Really excited to work with Amrish and the Pine Labs team to continue expanding the Fave platform across the Asia region. Pine Labs has been a great partner and investor for us, and it only made sense for us to join our synergies together and work towards our shared vision of building a truly global consumer and merchant platform,” said Joel Neoh, co-founder and CEO of Fave. 

He added, “India has the digital advantage with young demography, growing aspirational middle class with rising disposable income and increasing digital savviness. We are confident that the APAC e-payments landscape will continue to achieve exponential growth in the coming decade. Together, we will be stronger, faster, and better.”