Business payments and financial services startup Razorpay has acquired digital lending startup TERA Finlabs for an undisclosed amount. This is the third acquisition for the neobank Razorpay. It is expected to use the acquisition for its small and medium enterprise (SME)-based lending business, Razorpay Capital.
Razorpay Capital along with TERA Finlabs will be able to service the credit needs of over 10,000 businesses in India by the next year, a statement from company said.
Shot in the arm for Razorpay Capital
The Bengaluru-based TERA Finlabs is the Indian subsidiary of UK digital lender GAIN Credit. It provides risk management software, along with customized credit offerings.
TERA offers digital lending solutions for financial institutions and consumer tech companies. Its AI-enabled solutions simplify and automate customer onboardings, verifications, underwritings, and collections for lending institutions.
“TERA will provide its entire technology stack, risk management capabilities, and onboarding solutions to create and enable a credit line for Razorpay”s merchant network,” the statement added.
“In India, banks are wary of providing business loans to startups and new SMEs due to the risks attached to new revenue models of startups. Through our lending platform, Razorpay Capital, we have been striving to solve these cash flow challenges, making it easier for businesses to get finance and grow,” Razorpay CEO and founder Harshil Mathur was quoted as saying in the statement.
This 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, he added.
The two other acquisitions of Razorpay before TERA were: The real-time fraud detection platform Thirdwatch in 2018 and payroll management software Opfin in 2019.
Razorpay provides payment solutions to over 8 million businesses, including the likes of Zomato, Ola, Swiggy, Facebook, and Airtel.