The API infrastructure company Setu from Bengaluru has been purchased by Noida-based merchant commerce platform Pine Labs for an undisclosed sum. The sale is reportedly worth anywhere between $70-75 million, according to multiple media sources.
As part of the agreement, Setu will continue to run as a separate business and continue to support its current merchants. Pine Labs will be able to access Setu’s API infrastructure stack and enter integrated finance as a result of the agreement, extending fresh offerings 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 collaborates with Account Aggregator partners, non-banking financial institutions that are authorised by the Reserve Bank of India to conduct business as NBFC-AAs. The startup makes it possible for consumers to easily access services and to consolidate all of their financial data in one place.
The Data Empowerment and Protection Architecture, a paradigm for content-driven data sharing, governs how these Account Aggregators work (DEPA).
The company claims that there is a high demand for its goods, and that its APIs are now being utilised by a wide range of industry verticals, including startups, retail businesses, banks, insurance, and lending firms.
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.