Razorpay Acquires Finlabs for Supporting Small and medium enterprises financially

Recently, a financial services provider, Razorpay acquires Finlabs. The terms for the acquisition of this Bengaluru-based startup are not disclosed yet. TERA Finlabs is known to serve businesses with technology, capital, and risk solutions.

It was in 2018, when GAIN Credit, a UK-based digital lender established its subsidiary in India, by the name of TERA Finlanbs, to support its ambition to because of a global digital lender.

According to the fintech, Razorpay acquires Finlabs to bring its capabilities in credit underwriting, data-driven risk management, and capital solutions to help them offer financial support to Micro, Small and Medium Enterprises (MSMEs).

It is Razorpay’s strategy to strengthen its presence in the Business to Business (B2B) SME lending domain. In 2019, the firm founded Razorpay Capital, as a part of this strategy.

Some of the most general challenges faced by SMEs include liquidity and cash-flow, and Razorpay Capital with its business loans and instant settlements services trying to reduce the stress of SMEs.

Over the last three years, the firm has acquired a couple of companies including an Artificial Intelligence-driven company, Third watch in 2018, and a payroll management software company, Opfin in 2019, and Razorpay acquires Finlabs as its third acquisition deal.

With over $40 billion in Total Payment Volume (TPV), Razorpay wants to strengthen its position as a full-stack fintech company in India.

Some of the well-known customers of the fintech include, ICICI Prudential, Swiggy, Ola, Facebook, Cred, Zomato, Airtel. The company expects its customers count to reach 200 million in 2021.

According to TERA Finlabs’ CEO and co-founder, Pradeep Rathnam, it is the best time for them to unite with Razorpay. They will be able to continue serving in the MSMEs domain leveraging the technological capabilities of the fintech.

Razorpay’s chief executive officer (CEO) and co-founder, Harshil Mathur said that it is not very easy for startups and small businesses to get loans from Indian banks and Razorpay acquires Finlabs to leverage their knowledge in credit underwriting and risk management domain.