Payments and digital banking platform Razorpay has acquired Kuala Lumpur-based fintech Curlec in its first international purchase, kicking off its global expansion plans just over a month after bagging its largest-ever funding of $375 million.
Razorpay co-founder and CEO Harshil Mathur said in an address to the media that the company has acquired a majority stake in Curlec at a valuation of $20 million and the balance stake acquisition will be completed in the next year and a half.
Curlec was founded in 2017 by Zac Liew and Steve Kucia and like Razorpay is a business-to-business payment solution provider. The company offers recurring and subscription-based payment collection for businesses, besides billing, payouts and other payments solutions.
"While we are building in India, we are keeping an eye on the Southeast Asian market. There is a lot happening in countries like Malaysia, Indonesia, Philippines and Vietnam. The size of the South East Asian market is $170 billion and we expect it to scale up to more than $1 trillion by 2023," Mathur said.
During its previous funding announcements, the Tiger Global and Sequoia-backed fintech Razorpay had said that it plans to launch in two markets in the first half of 2022. Valued at $7.5 billion post its Series F round in December 2021, it is the second most valued fintech in India after Paytm, which recently went public. The startup’s valuation grew by 7x from $1 billion in just one year.
Mathur said that Razorpay will make further investments to scale up Curlec's presence. Giving a sense of the growth opportunity, he said, "Curlec has seen 5x growth in annual revenues since 2018. The e-commerce ecosystem in Malaysia is valued at about $21 billion and is expected to scale to $35 billion by 2025."
"With Curlec's founding team becoming a part of Razorpay, we will have a local team that understands the Malaysian and the Southeast Asian market at large," he added.
Razorpay will also look at launching cross-border payments through the acquisition and will also be a key product offering as it expands into other countries.
Zac Liew, co-founder and CEO of Curlec, said, “We are incredibly excited to be combining forces with Harshil, Shashank and the Razorpay team. We’ve long admired what they’ve built in India from afar and are fully aligned with a common vision of building payment and banking solutions from top to bottom, for any business.”
This is Razorpay's fourth acquisition overall after AI-based risk tech and SaaS platform TERA Finlabs, payroll and HR management platform Opfin and fraud analytics AI-platform Thirdwatch.
The startup counts Facebook, Ola, Zomato, Swiggy, Cred and others as its customers and achieved $60 billion in Total Payment Volumes (TPV) as of early December 2021. The company clocked over 300 percent growth year-on-year, for the second year in a row and plans to achieve $90 billion in TPV by the end of 2022.
TPV refers to the total value of payments and reversals executed on a payments platform, in this case across Razorpay's payment gateway, neobank and other products.
In India, Razorpay competes with payment gateways like PayU, Billdesk, etc, and B2B neobanking platforms like Open. The Indian fintech landscape too is seeing immense growth with large investments and foreign players like US's Stripe and UK's Revolut entering the country in the past few years.
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