Fintech firm Razorpay has reportedly purchased digital lending platform TERA Finlabs, an Indian unit of UK-based digital lender GAIN Credit.

The value of the transaction was not revealed.

The acquisition is in line with Razorpay’s plans to support MSMEs through “core-competencies in capital solutions, credit underwriting, and data-driven risk management capabilities”.

Based in Bengaluru, TERA Finlabs is an AI-based risk tech SaaS Platform that offers technology, risk and capital solutions to offer businesses embedded financing solutions.

The integration of the firm’s expertise with Razorpay Capital is expected to support more than 10,000 businesses in India by 2022.

TERA Finlabs co-founder and CEO Pradeep Rathnam was quoted by the Press Trust of India (PTI) as saying: “MSMEs were an underserved market for a long time. However, in the last 16 months, they have started to show rapid growth with their adoption of digital.

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“And this has created an opportunity for significant disruptions in the lending sector – Embedded Credit is one such innovation that I’m certain will transform this space.”

The latest deal is Razorpay’s third takeover since it set foot into the B2B SME lending sector with the launch of Razorpay Capital in 2019.

Earlier, Razorpay snapped up AI-based fraud prevention firm Thirdwatch as well as cloud-based payroll and HR management software provider Opfin.

Razorpay co-founder and CEO Harshil Mathur said that Razorpay Capital seeks to address the cash flow challenges of startups who often have trouble securing loans due to the risks associated with their new revenue models.

Mathur stated: “And progressing in that journey, an acquisition such as this fits perfectly with our vision of developing tailormade affordable credit solutions for the underbanked small businesses across industries so that they can digitally transform and disrupt.

“The team at TERA FinLabs comes with exceptional domain knowledge in credit underwriting & risk management and we see immense value in TERA Finlabs core lending infrastructure capabilities.”

Currently, Razerpay serves more than 8 million businesses, with its client list including Airtel, Ola, Zomato, Swiggy, Cred, among others.

Plans are on to reach 200 million customers this year.

The payments firm has GIC, Tiger Global, Sequoia Capital India and MasterCard among backers.