- Indian ecommerce players are expected to lose over $5 Billion to fraudulent transactions by 2020.
- Together with Thirdwatch, Razorpay is hoping to reduce fraudulent e-commerce transactions by 30-40 percent by next year.
- Razorpay is expecting a 5x growth in its revenue by the end of the next fiscal year.
India’s first converged payments solution company Razorpay has acquired Thirdwatch – a Gurgaon-based Artificial Intelligence (AI) driven company specialising in big data and machine learning for real-time fraud prevention – for an undisclosed amount.
Thirdwatch, now a wholly owned subsidiary of Razorpay will be based at the company’s headquarters in Bangalore.
Razorpay said that the acquisition of Thirdwatch is aligned with its “long term strategy of building core-competencies in big data and AI by bringing in disruptive minds that can solve unique business problems in the industry.”
Fraud has been one of the largest and longest concerns for ecommerce companies. Considering the pace at which digital adoption in the country is increasing, with digital transactions growing 50 percent y-o-y, the problem is becoming even bigger.
It is estimated that by FY’22, the Indian e-commerce industry may reach $150 Billion. With around 4-5 percent transactions being fraudulent, Indian ecommerce players are expected to lose over $5 Billion to fraudulent transactions by 2020.
Together with Thirdwatch, Razorpay believes that they can help reduce frauds by 30-40 percent by next year.
Moving Towards Cashless Ecosystem
By applying AI to fight fraud at scale, Thirdwatch will help Razorpay to build and introduce innovative technological solutions to facilitate the transformation of Indian economy from a cash driven infrastructure to a less cash ecosystem.
“This acquisition is a perfect fit. Our war is against cash, hence we want to address all problems surrounding it through new integrated data science technologies,” said Harshil Mathur, CEO and Co-Founder of Razorpay.
“Fraud has been the albatross around ecommerce companies’ necks for the longest time and we believe through this acquisition we will empower businesses across industries to digitally transform and disrupt, by improving their response and redressal mechanisms of combating fraud,” he added.
Shashank Agarwal, Founder of Thirdwatch, noted that there is a dire need for a data driven solution to identify fraudulent patterns to help ecommerce companies function at an optimal level and reduce losses of any kind.
“We’ve always believed in developing technologies that will not just limit e-commerce transactions to be secure and seamless but also make the systems intelligent with real-time insights through AI. A similar commitment was echoed by the Razorpay team and that’s what impressed us and brought us together.”
Huge Revenue Boost Expected
Established in 2014, Razorpay has been charting an exponential growth since its inception. They grew by 500 percent in the last one year. The company currently powers digital payments for 3,50,000 businesses like IRCTC, Airtel, BookMyShow, Zomato, Swiggy, Yatra and Zerodha, among others and plans to increase this to 450,000 by 2020.
With his acquisition, Razorpay is expecting a 5x growth in its revenue by the end of the next fiscal year.