One of the sectors of the economy which could function during the lockdown which was imposed because of the spread of pandemic was the Fintech sector. This sector had been working continuously and many startups have been coming up in this area. Currently, there are more than 2,000 fintech companies operating in the country, with 67% of them being introduced in the last five years. It is expected that the fintech industry in India will reach USD 150- USD 160 billion by 2025. The year 2015-2020 has seen tremendous growth in the fintech industry with the introduction and spread of digital payments, lending, and wealth segments.
The 10 leading startups in the Fintech industry of India are- Paytm, Lendingkart, MoneyTap, Razorpay, Policybazaar, Shiksha Finance, Instamojo, Pine Labs, ZestMoney, ePayLater. One of the startups on the list is Razorpay. The startup has turned unicorn on October 12, 2020, after receiving the funding of USD 100 million from GIC, and Sequoia India. The other participants of the round were Ribbit Capital, Tiger Global, Y Combinator, and Matrix Partners. These are all the existing investors of the startup. This all led to the value of the startup going a little beyond USD 1 billion and thus, entering the golden unicorn club.
The startup has come in the news for the acquisition it has made. Razorpay, as announced on July 19, 2021, has acquired TERA Finlabs, which is an AI-based risk technology SaaS platform. The amount for which the acquisition has been made has not been disclosed. This acquisition is the third one made by the company since its attempt into the B2B SME lending space with the launch od Razorpay Capital in 2019.
This acquisition will help the Razorpay to use the technological capabilities of TERA Finlabs, and then help the credit needs of over 10,000 businesses in the country by the next year.
Razorpay is a fintech startup that has the purpose of accepting, distributing, and processing money for small businesses through an online medium. This idea stuck into the minds of the founders when they realised the basic problem faced by the small businessmen, which was to accept the payments online. It was started in 2014 by the alumni of IIT Roorkee, Harshil Mathur and Shashank Kumar.
The startup has now become the leading startup in the fintech industry which works towards serving as the payment provider for the small business. The Bengaluru based startup had also turned a unicorn in October 2020, and is in severe competition with PayU, which is engaged in working towards accepting payments from various sources like UPU, credit cards, debit cards, and mobile wallets. The big names which come under the client list of Razorpay are- Cred, Oyo, Facebook, Flipkart, Swiggy, Zomato, Yatra, Goibibo, Byjus’, Zilingo, ICICI, and Airtel.
The startup before this acquisition has also acquired an AI company which helps in reducing Return- to Origin Fraud looses in e-commerce, ThirdWatch in 2018, and a payroll management software company, Opfin in 2019. The startup has the aim to process around USD 25 billion transactions for 10 million customers in the year 2021, and has the mission to serve 50 million businesses by 2025.
TERA Finlabs is a Bengaluru based Risk technology company that offers customized credit offerings, in order to make lending more affordable for customers and profitable for lenders. It is the Indian subsidiary of a leading UK digital lender, GAIN Credit.
The CEO and the co-founder of Razorpay made a statement saying that the team at TERA Finlabs has undoubtedly a lot of knowledge in underwriting and risk management. He further said that he and his team has seen exceptional core lending infrastructure capabilities in the team of TERA Finlabs.
The co-founder and CEO of TERA Finlabs said that he is excited that the strengths of both the companies Razorpay and TERA Finlabs will be coming together to make sure that the small businesses are no more burdened by the short term uncertainty. He even said that the platform of the company will help small businesses in making scalable and profitable credit businesses.
The two companies are a big name and now let us wait and watch what wonders they will bring when they start working together.
Edited by Tanish Sachdev