Digital payments solutions unicorn, Razorpay has agreed to pick up controlling stake in Bengaluru-based payment solutions provider, Ezetap Mobile Solutions for $126 million (Rs 1,000 crore) in a cash-and-stock deal, two individuals familiar with the deal told VCCircle.
Out of the amount mentioned above, $100 million will be a cash transaction, while the remaining would be in equity, one of the individuals said requesting anonymity.
Razorpay competes with the likes of Paytm, Innoviti Payment Solutions and Pine Labs in the payment solutions space.
Earlier in the day, news website Entrackr wrote about the development citing the regulatory filings by target firm's holding company in Singapore.
The transaction is likely to close within a few days, the other person added.
Email queries sent to Razorpay and Ezetap went unanswered till press time.
Byas Nambisan, chief executive officer of Ezetap, earlier confirmed that his company is in discussion with several investors, mostly global and local strategic players, besides prominent venture capital funds to raise around Rs 450 crore in funding.
Nambisan took charge of Ezetap in 2019 after co-founders Abhijit Bose and Bhaktha Keshavachar quit to join WhatsApp and float another venture in deep technology space, respectively.
The startup, launched in 2011, had initially started in the fintech space by processing card payments on mobile phones, also known as mobile point-of-sale (mPOS), for large enterprises and businesses. The company was then catering to over 300 big and small enterprises, including the likes of Amazon, Airtel, Reliance, Indian Oil Corporation, Bigbasket and Urban Ladder.
However, the company pivoted to a bank partnership model and this turned around the fortunes of the company that has raised $55-60 million in funding till date. Under the model, the startup started approaching banks with full suite of solutions on an Android terminal, including sector-specific payment solutions and value-added features like billing, instant EMIs via debit and credit cards, auto reconciliation and analytics among others.
The startup is currently working with banks such as Axis Bank, HDFC Bank, and ICICI Bank. It has also tied up with government institutions including the municipal corporation of Chennai for tax collection, Guwahati Municipal Corporation to provide citizen services, and Bengaluru Traffic Police (E-challan App), among others.
The company has claimed to have processed $8 billion in annualized gross transaction value (GTV) through 4 lakh retail points as of 2022 and is aiming to reach Rs 7,500 crore in annual revenue by 2024.
Established in 2014, Razorpay Software, the subsidiary of Razorpay Inc., is a full-stack financial services company that provides technology payment solutions to over 8 million businesses.
Founded by alumni of IIT Roorkee, Kumar and Harshil Mathur, Razorpay is the second Indian company to be a part of Silicon Valley’s largest tech accelerator, Y Combinator.
So far, Razorpay has raised $741.5 million in capital so far and was valued at $7.5 billion in December 2021, emerging as the second most highly priced startup in India after Paytm. It is backed by the likes of Lone Pine Capital, Alkeon Capital, TCV, GIC, Tiger Global, Sequoia Capital India, Ribbit Capital, Matrix Partners, Salesforce Ventures, Y Combinator and MasterCard.
Razopay had already struck a few acquisitions offlate. In February this year, it had bought a majority stake in Malaysia-based fintech firm Curlec, marking its first international acquisition.
Razorpay acquired Tera Finlabs, an artificial intelligence (AI)-based risk tech SaaS (software-as-a-service) platform in 2020. The company also acquired Opfin, a payroll and HR management solution in 2019. In 2018, Razorpay marked its first acquisition with Thirdwatch, a fraud analytics AI-platform.