The Sequoia Capital-backed Indian company Razorpay said it had acquired the offline payments company Ezetap. A source with knowledge of the transaction estimated the deal’s value at $150 million.
The acquisition was the biggest one made by Razorpay, a company that provides payment gateway services for online merchants and is valued at over $7 billion, according to a release.
It said the agreement would strengthen initiatives to reach the offline sector, which still represents the majority of electronic payments in India. Point-of-sale devices are made by Ezetap, which also processes over $10 billion in transactions annually in India.
Razorpay co-founder Shashank Kumar said Ezetap would help it develop in this area. “There is still a large portion of offline payments and in-person payments that we don’t cover,” he said.
According to the source, Ezetap will continue to operate independently following the acquisition. The agreement involves a $150 million payout to the company, with an additional $50 million payment possibly contingent upon how well it performs over the next year.
According to Kumar in an interview, the agreement will also enable Razorpay to cross-sell its services, such as loan offerings, to offline businesses. Razorpay presently provides services to over 8 million businesses and has handled payments totalling $80 billion since its launch about eight years ago.
The acquisition comes as solution providers in India try to secure a tight grip on online and offline payments.