Pine Labs Acquires Shopflo Technologies for Rs 88 Crore to Strengthen Online Merchant Offerings
Digital payments company targets mid-market and small business segments amid competition with Razorpay and PayU
Quick Look
- Pine Labs has acquired Shopflo Technologies, an ecommerce enabler for D2C brands, for Rs 88 crore ($9.4 million).
- The acquisition marks Pine Labs' first investment after going public and will be funded through internal accruals.
- Shopflo, founded in 2021, works with 1,000 D2C brands offering payment checkout, discounts, loyalty programmes, and a payment orchestration platform.
AI-generated summary
Why It Matters
Pine Labs is a digital payments major that went public recently. This is their first acquisition after going public. The company previously acquired Setu in 2022 to strengthen bill payments. The digital payments market in India is highly competitive with players like Razorpay, Cashfree, and PayU dominating different segments.
Digital payments major Pine Labs has acquired ecommerce enabler Shopflo Technologies for Rs 88 crore ($9.4 million), aiming to strengthen its online merchant offerings. This strategic move allows Pine Labs to expand its reach into the mid-market and small business segments, intensifying competition with rivals like Razorpay, Cashfree, and PayU.
In a filing with the stock exchanges, Pine Labs said its board has approved an investment of Rs 88 crore for a 100% stake in the New Delhi-based startup. Founded in 2021, Shopflo works with 1,000 D2C brands, offering capabilities such as payment checkout, discounts, loyalty programmes, and other features. It also provides a payment orchestration platform that enables brands to route transactions in a way that reduces payment failures.
In 2022, Shopflo raised around Rs 24.5 crore ($2.6 million) in seed funding from Better Capital, Tiger Global Management, and TQ Ventures. All existing investors will exit the company as part of the deal.
“This is our first investment after going public and will be fully funded through internal accruals,” said Amrish Rau, chief executive officer of Pine Labs. “Even before going public, we had around Rs 1,100 crore in cash.”
Rau said Pine Labs Online has grown 100% year-on-year over the past three years, focusing on large enterprises and bill payment clients. With this acquisition, the company will also target the mid-market and small business segment, where competitors such as Razorpay have a strong presence.
The three cofounders of Shopflo — IIT graduates Priy Ranjan, Ankit Bansal, and Ishan Rakshit — will step down from their executive roles after the acquisition. They will remain associated with the company in an advisory capacity. Shopflo will continue to operate independently, with headcount expected to increase to around 65. Pine Labs Online will have a team of about 400 people following the acquisition, Rau said.
Pine Labs had earlier acquired Setu in 2022 to strengthen its bill payments and online payments operations. The company is yet to announce its March quarter results, and Rau did not share any forward-looking guidance on the revenue impact of the acquisition.
According to filings with the corporate affairs ministry, Shopflo reported revenue of Rs 15.5 crore in FY25 and a net loss of Rs 3 crore. Pine Labs reported a profit of Rs 42 crore on operating revenue of Rs 744 crore in the December quarter, up 23% on year.
Open Questions
- What will be the revenue impact of this acquisition for Pine Labs?
- How will Pine Labs integrate Shopflo's technology into its existing offerings?
- What specific synergies are expected between Pine Labs Online and Shopflo?
