Razorpay acquires TERA Finlabs; furthers B2B Credit Infrastructure

Fintech startup Razorpay has announced its acquisition of TERA Finlabs, an AI-based risk tech SaaS Platform, for an undisclosed amount.

Laxitha Mundhra
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FinTech Razorpay has announced its acquisition of TERA Finlabs - an AI-based risk tech SaaS Platform. The companies have not disclosed the value of the transaction yet. This third acquisition marks Razorpay’s strong foray into the B2B SME lending space. To bring all the B2B credit infrastructure in one unit, the company launched Razorpay Capital in 2019.


Over the last few months, Razorpay has been actively involved in solving the banking and lending problems of businesses by strengthening their fintech and banking infrastructure. Lending products launched during lockdowns, such as Cash Advance and Credit solutions with instant settlements, have helped SMEs solve cash flow problems. These accessible funds and transparent pricing mechanisms have leveled the playing field for MSMEs. This acquisition of TERA Finlabs is aligned with Razorpay's strategy of financially supporting as many MSMEs as possible by building core competencies in capital solutions, credit underwriting, and data-driven risk management capabilities.

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. Razorpay believes bringing in disruptive minds from companies such as TERA Finlabs can solve unique business problems in the industry. TERA Finlabs is a Bengaluru-based startup that provides technology, risk, and capital solutions to enable innovative embedded financing 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.

Speaking at the event, Harshil Mathur, CEO, and Co-Founder, Razorpay said, “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.”


“Progressing in that journey, 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. The team at TERA FinLabs comes with exceptional domain knowledge in credit underwriting & risk management and we see immense value in TERA Finlabs' core lending infrastructure capabilities. Together, we are looking forward to addressing newer working capital issues faced by MSMEs and soon create a major dent in the credit space in the next few years,” he further added.

Pradeep Rathnam, Co-Founder and CEO, TERA Finlabs said, “MSMEs were an underserved market for a long time. However, in the last 16 months, they have started to show rapid growth with their adoption of digital. And this has created an opportunity for significant disruptions in the lending sector - Embedded Credit is one such innovation that I'm certain will transform this space. 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. Our robust end-to-end platform will enable new businesses to build a scalable and profitable credit business.”

Mukund Venkatesh – Managing Director India, GAIN Credit said, “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. We are excited for the great things TERA will do as part of the Razorpay Capital team.”


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.

This is Razorpay's third acquisition in three years.

Before this, Razorpay acquired Thirdwatch (an Artificial Intelligence-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.

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