Razorpay acquires risk tech startup TERA Finlabs


Bangalore: Razorpay has acquired TERA Finlabs – an AI-backed risk tech SaaS platform, for an undisclosed amount.

TERA Finlabs is a Bangalore based startup that provides technology, risk and capital solutions for businesses. TERA Finlabs is an Indian subsidiary of GAIN Credit – a leading UK digital lender, which was launched in 2018 to expand its global footprint in digital lending.

This is Razorpay’s third buyout within three years, following its foray into the B2B SME lending space with the launch of Razorpay Capital in 2019. Razorpay Capital has been solving liquidity and cash-flow challenges of SMEs, by offering instant settlements and business loans.

TERA Finlabs’ acquisition aligns with Razorpay’s strategy of financially supporting MSMEs. It is building core competencies in capital solutions, credit underwriting, and data-driven risk management capabilities.

Razorpay will leverage TERA Finlabs’ entire technology stack, risk management capabilities, and onboarding solutions to enable a credit line for its network.

“An acquisition such as this fits perfectly with our vision of developing tailor-made affordable credit solutions for the underbanked small businesses across industries so that they can digitally transform and disrupt,” said Harshil Mathur, CEO and Co-Founder, Razorpay.

“The team at TERA FinLabs comes with exceptional domain knowledge in credit underwriting and risk management and we see immense value in TERA Finlabs core lending infrastructure capabilities,” added Mathur.
“There couldn’t have been a better time than now for us to join hands with Razorpay and its technological capabilities to support the MSME segment. We are excited that the strengths of Razorpay and TERA Finlabs are now coming together to ensure that small businesses aren’t burdened by the short-term uncertainties,” said Pradeep Rathnam, Co-Founder and CEO – TERA Finlabs.

“While we are sad to see TERA Finlabs leave the GAIN Credit family, this acquisition is a testament to the lending SaaS platform that we built. And most importantly, the team at TERA that maintained a laser focus on deploying solutions that enabled profitable unit economics for “new to credit” customer segments,” said Mukund Venkatesh, MD – India, GAIN Credit.

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

Prior to this, Razorpay acquired Thirdwatch (an AI driven company that helps reduce Return-to-Origin (RTO) fraud losses in e-commerce) in 2018 and Opfin (a payroll management software company) in 2019.

Razorpay has been witnessing a 40-45% growth, month-on-month. The company has achieved $40 billion TPV (Total Payment Volume) and aims to further solidify its position as one of India’s largest full-stack fintech companies.

Razorpay currently powers payments for over 8 million businesses including the likes of Facebook, Airtel, Ola, Zomato, Swiggy, Cred, ICICI Prudential among others and is all set to reach 200 million customers by 2021.

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