Razorpay acquires Ezetap for $200 mn; forays into offline payments

Fintech unicorn Razorpay has acquired Ezetap, India’s leading offline Point-Of-Sale (POS) company which was founded with the aim of simplifying the in-person offline payments experience. The value of the transaction is around $200 million, according to sources.

The acquisition enables Bengaluru-based Razorpay’s foray into offline payments. With this acquisition, Razorpay will be one of the few companies across the world with a significant online and offline presence in payments. This marks Razorpay’s sixth and biggest acquisition thus far.

With an $80 billion total payment volume (TPV) as of April 2022, Razorpay is now eyeing a 10-12 million merchant base by next year.

“There is a huge opportunity in redefining omnichannel payments that this acquisition offers,” said Harshil Mathur, CEO and co-founder of Razorpay. “We believe that the businesses of tomorrow will not distinguish between physical and digital channels and will expect a unified payment experience through a single integrated platform, both in the offline and online world.”

Mathur added, “With Ezetap on board, we believe we are well-poised to create a similar disruption as done in online payments and simplify in-person payments with the same passion and effort we have devoted to online payments.”

Razorpay has already onboarded 8 million businesses. It provides services such as accepting payments and managing banking operations for online businesses.

While digital penetration is growing across India, offline payments remain a vital part of the ecosystem. Over the years, Ezetap, has transformed the way offline payments are made. The company provides software for financial technologies, including POS solutions, billing, loyalty solutions among others, enabling businesses to accept payments in-store and on-delivery.

The company currently serves over 500,000 touchpoints, including the likes of Amazon and BigBasket, works closely with India’s largest banks including SBI, HDFC, ICICI and Axis. It processes over $10 billion in annual transactions on its platform.

Over the last two years, businesses have adopted a hybrid approach to reach their customers after the pandemic. This partnership with Ezetap will empower Razorpay to become India’s largest omnichannel payments solution for all businesses.

“Over the last eleven years, we have strived to build a robust payment ecosystem for thousands of offline businesses so that they can accept any mode of payment from their customers, across every touch point,” said Byas Nambisan,CEO of Ezetap. “We share Razorpay’s vision of simplifying payments and banking for Indian businesses.”

Ezetap was co-founded in 2011 by Abhijit Bose, a former executive at mobile commerce platform ngpay and Bhaktha Keshavachar, a former engineer at Intel and AngelPrime (rebranded as Prime Ventures) an incubator started by serial entrepreneurs, Bala Parthasarathy, Shripati Acharya and Sanjay Swamy. It had attracted top investors such as Social+Capital which was run by former Facebook executive Chamath Palihapitiya, billionaire Nicolas Berggruen's fund, PayPal's Peter Thiel and social network company Yammer co-founder David Sacks.

Last December, Razorpay raised $375 million in the Series F round of funding at a $7.5-billion valuation, making it India’s second-most valuable start-up in this space, after Paytm, which later went public. The company valuation surged over seven times in 15 months, helping it push Walmart-owned digital payments firm PhonePe to the third spot on the country’s most-valuable fintech list. The funding is also fueling Razorpay’s acquisition strategy, according to the sources.

Prior to Ezetap, Razorpay acquired IZealiant Technologies, a leading fintech startup that provides payments technology solutions for banks in March 2022. Before that the company acquired Malaysia-based Curlec, a leading recurring revenue platform in February this year, announcing its expansion into South-East Asia. The other previous acquisitions include TERA Finlabs, (AI-based risk tech SaaS Platform) in 2021, Opfin (Payroll & HR management solution) in 2019 and Thirdwatch (Fraud Analytics AI-platform) in 2018.