Indian fintech firm Razorpay acquires lending startup Tera Finlabs

Indian fintech firm Razorpay has acquired Tera Finlabs, a subsidiary of UK-based digital lender Gain Credit, for an undisclosed sum.

(From left) Razorpay co-founders Harshil Mathur and Shashank Kumar/ Photo credit: Razorpay

Bengaluru-based Tera Finlabs provides technology-based solutions, such as risk management, customer onboarding, verification, underwriting, and collections, to digital lenders.

Razorpay said the acquisition is in line with its plans to support micro, small, and medium-sized enterprises by building capital solutions, credit underwriting, and data-driven risk management capabilities. The company added that its business-to-business lending arm Razorpay Capital and Tera Finlab’s technology capabilities will be available to more than 10,000 businesses in India by next year.

“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 said in a statement.

Tera Finlabs is Razorpay’s third acquisition to date. In 2018, Razorpay acquired Thirdwatch, a startup with a specialization in big data and machine learning for real-time fraud prevention. In the following year, Razorpay took over Opfin, a payroll management software company.

According to the fintech firm, it is currently recording a 40% to 45% month-on-month growth and has achieved US$40 billion in total payment volume. Razorpay provides payment solutions to over 8 million businesses, including the likes of Zomato, Ola, Swiggy, Facebook, and Airtel. The company is aiming to acquire 200 million customers by 2021.