Razorpay’s acquisition of offline payments provider Ezetap is expected to add about 10-15 per cent to the fintech unicorn’s payment volumes initially, CEO and co-founder Harshil Mathur told BusinessLine. 

He added that the future synergies can be far higher on the back of cross-selling opportunities and omni-channel payment experience. According to sources close to the development, “Razorpay has acquired 100 per cent stake in Ezetap for around $150-200 million, out of which the majority is cash along with a minority stock component.” 

Ezetap has reported around $20 million in revenue in December 2021, which makes Ezetap valuation in this deal to be almost 10x of its revenue. “It is not a very high valuation, given that it is a SaaS (software-as-a-service) company. SaaS companies’ multiples across the world are in the range of 7x to 10x,” the source added. 

Mathur noted that Ezetap’s acquisition is majorly driven by the kind of opportunity Razorpay sees in the omni-channel ecosystem and the cost it would take Razorpay to build something of this scale.

The advantage Ezetap brings

Ezetap provides software for financial technologies, including Point of Sales (POS) solutions, billing, loyalty solutions among others, enabling businesses to accept payments in-store and on-delivery. The company currently serves over five lakh touch-points, including the likes of Amazon and BigBasket, works closely with banks including SBI, HDFC, ICICI and Axis, among others, and processes over $10 billion in annual transactions on its platform.

“The cost to acquire that many touch-points and costs to build something like Ezetap grounds-up would have taken a significant amount of time, effort, energy and money,” he added. 

The entire Ezetap team of around 300 employees will join Razorpay and work as an independent business unit within Razorpay. The company was cash flow break-even at the time of acquisition.

“We share Razorpay’s vision of simplifying payments and banking for Indian businesses, being available wherever their customers are, and being a one-stop payment and banking platform across channels. And this step takes us at Ezetap closer to achieving that dream. We join Razorpay’s suite of products to collectively offer businesses the best-in-class omni-channel payments experience,” said CEO of Ezetap, Byas Nambisan. 

Other acquisitions

Further, commenting on the potential to make more acquisitions, Razorpay co-founder and managing director, Shashank Mathur, said, “We want to spend a lot of energy in ensuring that we make this one big acquisition successful. So there might be smaller opportunistic acquisitions that we will keep doing, which are much smaller in number and range. But for now, this is pretty much the only large question that we plan to do.”

Prior to this, Razorpay acquired IZealiant Technologies in March 2022, a fintech start-up that provides payments technology solutions for banks; Malaysia-based Curlec, a recurring revenue platform in February 2022; TERA Finlabs, (AI-based risk tech SaaS Platform) in 2021; Opfin (Payroll and HR management solution) in 2019; and Thirdwatch (Fraud Analytics AI-platform) in 2018. 

Over the last eight years, Razorpay has built a network of 8 million businesses. It has recorded $80 billion TPV (total payment volume) in April 2022 and is now eyeing a 10-12 million merchant base by next year.

comment COMMENT NOW