Bengaluru-based online payments solution provider Razorpay on Monday announced the acquisition of Thirdwatch, an Artificial Intelligence (AI) driven company specialising in big data and machine learning for real-time fraud prevention, for an undisclosed amount.
Over the last four years, Razorpay has been actively involved in solving problems towards strengthening the fintech and banking ecosystem. Acquisition of Thirdwatch will augment the work Razorpay has been doing in AI, machine learning and big data as it looks to improve payment experience and avoid fraudulent transactions, the company said in a release.
Thirdwatch, now a wholly-owned subsidiary of Razorpay will be based at the company’s headquarters in Bengaluru.
Speaking about its first acquisition, Harshil Mathur, CEO and Co-Founder of Razorpay, said,
“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. 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. Together, I believe we can help reduce frauds by 30-40 percent by next year.”
In June, Razorpay had raised $75 million as a part of its Series C funding, led by new investors Ribbit Capital and Sequoia India with participation from existing investors Tiger Global Management and Y Combinator.
Earlier, the company had raised a total of $31.5 million across Series A (2016) and Series B (2018) rounds, from 33 angel investors and a strategic investment by MasterCard.
Established in 2014 by IIT-Roorkee alumni Shashank Kumar and Harshil Mathur, Razorpay 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. The payments solution company expects a 5x growth in its revenue by the end of the next fiscal year.
Estimates suggest that by FY’22, the Indian e-commerce industry is expected to reach $150 billion. With around 4-5 percent transactions being fraudulent, Indian ecommerce players will lose over $5bn to fraudulent transactions by 2020.
By applying AI to fight fraud at scale, Thirdwatch has significantly boosted Razorpay’s quest to build and introduce innovative technological solutions to facilitate the transformation of Indian economy from a cash driven infrastructure to a less cash ecosystem.
Shashank Agarwal, Founder of Thirdwatch added,
“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.”
Founded in 2016, Thirdwatch is empowering the Indian e-commerce space with the introduction of an AI driven fraud prevention platform Mitra. The real-time AI platform uses big data technology, data science and design to help online sellers to increase their bottom-line by expanding their geographical reach without worrying about the Return-to-Origin (RTO) losses. It raised angel funding in 2017 from India Angel Network.