Razorpay acquires TERA Finlabs to reinforce B2B credit infrastructure

The acquisition aligns with Razorpay’s goal to develop affordable credit solutions for underbanked small businesses

Razorpay, a fintech startup based in India, has recently announced the acquisition of TERA Finlabs, a Bengaluru-based startup which offers technology, capital and risk solutions to offer integrated financing solutions to businesses.

As per sources, the acquisition will see Razorpay Capital and TERA Finlab combine their technological capability to satisfy the credit needs of over 10,000 businesses in India by next year.

Reportedly, this is the 3rd acquisition undertaken by Razorpay in less than three years. Earlier, the company acquired Thirdwatch - an Artificial Intelligence-driven organization that helps reduce RTO or Return-to-Origin fraud losses in e-commerce, and Opfin - a payroll administration software company. However, the financial terms of the acquisition were not disclosed by the corporation.

According to Harshil Mathur, Razorpay’s CEO and Co-Founder, banks in India are cautious about funding new startups and SMEs due to the obvious risks associated with new revenue models. Razorpay Capital has been working to resolve these cash flow issues through their firm’s lending platform, making it easier for firms to receive credit and grow.

An acquisition like this aligns well with the company's objective of delivering tailored, affordable financial solutions for underbanked small businesses across industries to enable them to digitally transform and innovate.

Razorpay has strengthened its position in the business-to-business (B2B) small and medium-sized enterprises (SME) finance sector with the launch of Razorpay Capital in 2019. With a Total Payment Volume (TPV) of USD 40 billion, the company now powers payments for over 8 million businesses, including Ola, Swiggy, Zomato, Cred, ICICI Prudential, Airtel and others.

Razorpay, backed by GIC, MasterCard, Sequoia Capital India, and Tiger Global, has been growing at a rate of 40%-45% month over month. Additionally, it intends to outreach 200 million customers by 2021.

Source Credit - https://www.business-standard.com/article/pti-stories/razorpay-acquires-tera-finlabs-121071900160_1.html