Pine Labs, a merchant commerce platform, is acquiring Setu, an API (application programming interface) fintech start-up. The embedded finance market value is expected to exceed $138 billion by 2026 as APIs are intensifying the competitive fintech landscape. Pine Labs, backed by investors such as Sequoia Capital, PayPal, and Mastercard, competes with fintech companies such as BharatPe, Mswipe, Paytm, and Razorpay. Setu said it worked with account aggregators, which are non-banking financial companies operating under the NBFC-AA licence from the Reserve Bank of India. It enables consolidating the financial data of users at a single location and allows them to access services quickly. Account aggregators operate under the NITI Aayog’s consent-driven data-sharing framework called Data Empowerment and Protection Architecture (DEPA).
“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, and credit underwriting. Pine Labs, which was valued at about $5 billion in a funding round early this year, has been active in M&A (mergers and acquisitions). In April it made a majority investment in Mosambee, an end-to-end payment solution provider in India. This valued Mosambee at more than $100 million. In February, it acquired Mumbai-based online payments startup Qfix, for an undisclosed sum.