Razorpay acquires TERA Finlabs, Telecom News, ET Telecom

Fintech startup Razorpay announced Monday that it has acquired TERA Finlabs, a Bengaluru-based startup that provides technology, risk and capital solutions to enable integrated finance solutions for businesses.

TERA Finlabs is an Indian subsidiary of the UK-based digital lender, GAIN Credit.

The company did not disclose the financial details of the transaction, however.

“This acquisition of TERA Finlabs is aligned with Razorpay’s strategy of financially supporting as many MSMEs as possible by developing core competencies in capital solutions, credit underwriting and data-driven risk management capabilities.

“TERA will provide its entire technology stack, risk management capabilities and integration solutions to create and activate a line of credit for Razorpay’s merchant network,” said a statement.

Razorpay Capital and the technological capabilities of TERA Finlab will be able to meet the credit needs of more than 10,000 companies in India by next year, the statement said.

Razorpay had made a foray into the business-to-business (B2B) lending space to small and medium-sized enterprises (SMEs) with the launch of Razorpay Capital in 2019.

This is Razorpay’s third acquisition in less than three years. Previously, Razorpay acquired Thirdwatch – an artificial intelligence-based company that helps reduce losses from return-to-origin or RTO fraud in e-commerce – in 2018, and Opfin – a software company from payroll management – in 2019.

Razorpay CEO and co-founder Harshil Mathur said that in India, banks are reluctant to provide business loans to startups and new SMEs because of the risks associated with new startup income models.

“Through our lending platform, Razorpay Capital, we have worked to address these cash flow issues, which makes it easier for businesses to obtain finance and grow. And moving forward, an acquisition like this fits perfectly with our vision of tailor-made development – have created affordable credit solutions for small, underbanked businesses in all industries so they can transform and disrupt digitally, ”he added .

Mathur pointed out that the TERA FinLabs team has exceptional industry knowledge of credit underwriting and risk management, and Razorpay sees immense value in the core capabilities of TERA Finlabs’ lending infrastructure.

“MSMEs have long been an underserved market. However, over the past 16 months, they have started to show rapid growth with their digital adoption. And that has created an opportunity for significant disruption in the lending industry – integrated credit is such an innovation that I’m sure will transform this space, ”said Pradeep Rathnam, co-founder and CEO of TERA Finlabs.

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

Razorpay – which is backed by investors like GIC, Tiger Global, Sequoia Capital India and MasterCard – has grown 40-45% month-over-month. It has reached $ 40 billion in TPV (Total Payment Volume) and currently powers payments to over 8 million businesses, Airtel, Ola, Zomato, Swiggy, Cred, ICICI Prudential and others. It aims to reach 200 million customers by 2021.

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