By M. Sriram
MUMBAI (Reuters) - India's Razorpay said on Thursday it had bought offline payments firm Ezetap, marking the Sequoia Capital-backed firm's latest bet on the payments industry in a deal which a source with knowledge of said was worth $150 million.
Razorpay, which is valued at more than $7 billion and offers payment gateway services for online merchants, said in a statement that the acquisition was its biggest to date.
It said the deal would boost efforts to tap the offline market which still accounts for a bulk of electronic payments in India. Ezetap, whose products include point-of-sale machines, processes more than $10 billion in annual transactions in India.
Razorpay co-founder Shashank Kumar said Ezetap will 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.
The source said Ezetap will continue to operate independently after its acquisition, adding that the deal includes a $150 million payment to Ezetap, with another possible $50 million linked to its performance over the next year.
The deal will also help Razorpay cross-sell its services, including loan offerings, to offline businesses, Kumar said in an interview, adding that Razorpay currently serves more than 8 million businesses and processed payments worth $80 billion since its inception about eight years ago.
The acquisition comes as solution providers in India try to secure a tight grip on both online and offline payments.
India's Pine Labs, which for years focussed only on offline payments, last year started processing online transactions, a business from which it is targeting $4-5 billion in monthly transactions within two years, Reuters reported.
(Reporting by M. Sriram; Editing by Aditya Kalra and Alexander Smith)