Gift cards have emerged as a strong payment tool during the global pandemic outbreak, with the adoption of digital vouchers surging among consumers across the Asian markets. The growing shift towards gift cards as a payment tool has, therefore, led to strong revenue growth for fintech firms like Pine Labs, which generated a third of its revenue through the gift card business vertical.
The core product offering of Pine Labs, a point of sale (PoS) solution, accounted for 60.5% of the total revenue. During the FY 2022 period, the segment reported a growth of 38.8% compared to FY 2021. For the financial year, the revenue from the business vertical reached INR 6.15 billion. As per the financial statements of the firm, the fintech startup managed to go past INR 10 billion in operating revenues during FY 2022, reporting a growth of 40.7% compared to the year before, when the operating revenue stood at INR 7.26 billion.
In India, Pine Labs is the top issuer of prepaid payment instrument providers. According to a report from the Reserve Bank of India (RBI), the firm had issued more than 185 million gift cards and loyalty cards in the country, as of November 2022. This trend is projected to further continue in 2023, as the firm keeps strengthening its offerings across employee rewards, customer loyalty programs, and channel partner programs for small and large enterprises, through acquisition deals.
In 2020, Pine Labs acquired Fave, the Southeast Asian fintech firm, for a total of US$45 million in a cash and stock deal. Fave, which offers vouchers, gift cards, and deals, generated a revenue of INR 650 million in FY 2022. In 2023, the firm made further acquisitions to boost the growth of its gift card business vertical.
With the addition of Saluto Wellness under its umbrella of services and product offerings, Pine Labs is projected to further drive its revenue growth from the short-term perspective. Notably, the firm has been on an acquisition spree over the last 12 months. Along with Saluto Wellness, the firm also acquired Qfix, Mosambee, and Setu. These acquisitions are part of the firm’s strategy to diversify revenue by offering various software and value-added services. PayNXT360 expects the firm to enter into more acquisition deals, as the funding winter continues to provide lucrative buyout opportunities in the global fintech market.
To capitalize on the growing adoption of gift card solutions among consumers, the fintech firm is also expanding its presence aggressively in the global market. For instance,
The gift card industry in the Emirati market is growing at a rapid pace and the entry of Pine is projected to further drive the competitive landscape in the country. Several players, including YOUGotAGift, are competing for market share in the fast-growing gift card industry in the Emirates. In February 2023, YOUGotAGift also announced that the firm had raised US$3 million from Tenami Capital, which the firm plans to use for expanding its presence in the Middle East market.
For Pine Labs, the growing presence in new markets, coupled with a strategic acquisition to strengthen its industry position, will keep assisting revenue growth. Furthermore, it will also enable the firm to place itself strategically to break even from the short to medium-term perspective, thereby making the public offering even more lucrative for investors around the world.
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