India-based merchant commerce platform Pine Labs has acquired Fave, its investee consumer FinTech platform in a cash and equity deal valued at US$45 million. According to the company sources, Fave’s investors will receive an all-cash payout, while the key employees and founders will receive both cash and shares of Pine Labs.
With this acquisition, Fave reinforce its market position in Southeast Asia. The consumers in India will be able to use the Fave app across 50,000 merchant network points powered by Pine Labs across major cities by the end of this year. Both the companies are looking for a joint expansion in Asia and aim to unlock huge consumer opportunities across FMCG markets, retail, fashion, and F&B.
According to the terms of the agreement, the founders of Fave will broaden their role to lead the overall consumer platform in Asia. The company will also be looking at hiring 100 new employees in India and Southeast Asia to increase smart savings and cashless payments across the regions.
The introduction of the Fave app in India comes at a time when UPI transactions in the country have soared to 2.7 billion in March 2021. Over the last two quarters Pine Labs has recorded a significant growth of 171 percent in UPI transactions.
According to Joel Neoh, founder of Fave, India has a digital advantage due to its young demography and the rising disposable income of the aspirational middle-class along with increasing digital savviness. He envisions that the company will achieve exponential growth in the coming decade due to these reasons.
Fave claims since 2016 it has empowered six million consumers across Southeast Asia to save more than $400 million across 40,000 retailers.
Founded in 2015, Fave presently operates in 35 cities across Malaysia, Indonesia, and Singapore. The startup is backed by China-based SIG Asia Investments, Sequoia India, and Venturra Capital. Last year the company had raised $46.9 million in venture capital from its investors.
In July 2020, Pine Labs became an investor in the company when both formed a strategic partnership. Fave had acquired Groupon’s assets in Malaysia and Singapore in 2016 to expand its product lines. In Southeast Asia, Fave competes with Rebate Mango and ShopBack.
Pine Labs offers a merchant platform that powers online and offline last-mile retail transactions, offers financial solutions, and provides consumer insights for targeted sales. Pine Lab’s cloud-based platform powers more than 350,000 POS terminals across 3700 cities in Malaysia and India. Over 100,000 merchants across electronics, fashion, airlines, F&B sectors use Pine Lab’s solutions.
Pine Lab’s key investors include Sequoia Capital India, Temasek Holdings, Paypal Ventures, Lone Pine Capital among others.