Razorpay strikes third acquisition with TERA Finlabs

Online payment gateway startup Razorpay Software Pvt Ltd, flush with fresh capital that it raised in April, on Monday said it has bought risk tech software as a service (SaaS) platform TERA Finlabs in its third acquisition. 

Razorpay said in a statement that the acquisition fits into its strategy to support micro small and medium enterprises (SMEs). 

In 2019, Razorpay had entered into the business to business (B2B) SME lending space with the launch of Razorpay Capital. 

Razorpay Capital along with TERA Finlab will be able to service the credit needs of over 10,000 businesses in India by the next year, it added. 

Bengaluru based TERA Finlabs is an Indian subsidiary of UK digital lender GAIN Credit. 

"There couldn't have been a better time than now for us to join hands with Razorpay and its technological capabilities to support the SME segment," said Pradeep Rathnam, co-founder and CEO, TERA Finlabs. 

"Our robust end-to-end platform will enable new businesses to build a scalable and profitable credit business," he added. 

This is Razorpay's third acquisition in less than three years. It had previously acquired artificial intelligence (AI) startup Thirdwatch Data Pvt Ltd and cloud based payroll management solution startup Opfin. 

Razorpay claims it has been witnessing a 40-45% growth month-on-month. The company has achieved $40 billion total payment volume (TPV). It caters to over eight million businesses including Facebook, Airtel, Ola, Zomato, Swiggy, Cred and ICICI Prudential. It says it is all set to reach 200 million customers by 2021. 

Razorpay was set up in 2013 by IIT Roorkee alumni Shashank Kumar and Harshil Mathur. In April 2021, it raised $160 million (Rs 119 crore) in a new funding round, tripling the company’s valuation to $3 billion (about Rs 7,490 crore). The company has raised $366.5 million in investments so far, which includes $100 million in Series D funding in 2020.