Sequoia Capital, one of the most active venture capital firm in India, is reportedly looking for options to sell stake of its portfolio company Pine Labs – India’s largest POS service provider.
As per the report from Economic Times, citing people aware of the matter, the VC firm is looking to get a valuation of about $1 billion for it to completely exit the company. Notably, Sequoia Capital owns about two-thirds of Pine Labs.
In it does not get the valuation it is seeking, the firm is also ready to take a partial exit from the company. Sequoia Capital first invested $1 million in the Noida-based company in 2009.
A person aware of the development says:
The formal mandate that is ongoing is for a stake sale. Currently , the company is being valued at $600-700 million by peers but if a strategic investor sees long-term potential, and agrees on the premium that matches the Sequoia ask, the entire company will be up for grabs. Sequoia is extremely bullish on the company and is not desperate to cash out. Both options are therefore on the table.
However, in the same report, Economic Times notes that Sequoia Capital has denied any such developments. In an email response to the news outlet, Shailendra Singh, MD at Sequoia Capital, said, “Sequoia has no desire to sell any of its stake at this time. This is consistent with Sequoia’s global approach of staying invested in market leaders for the long term.”
Pine Labs has given a mandate to Avendus Capital to raise $100 million for a minority stake in the company. Pine Labs’ CEO Lokvir Kapoor has confirmed this development.
The company is looking for fresh capital as it eyes spreading its presence outside its home market, and plans to make a couple of acquisitions for the expansion of its business.
It is looking to expand its operations into international markets, starting with Malaysia and UAE this year. By next year, the company plans to have presence in around 10 countries.
Along with startups with Ezetap, Pine Labs is competing against the likes of Axis Bank, HDFC Bank and SBI, which deploy their own POS terminals directly at merchant outlets.