Mastercard-backed digital payments upstart Razorpay, has announced its first acquisition today. The company is acquiring Thirdwatch, a startup that has developed an AI powered fraud prevention tech. Amount and terms of the acquisition remain undisclosed. This also marks Razorpay’s first acquisition.
In terms of what synergies this new partnership will bring in for Razorpay, the company plans to induct Thirdwatch’s tech into its large existing base of ecommerce clients. In a blog published on the company site, Razorpay co-founder Shashank Kumar says, “Thirdwatch’s AI-driven solution can empower e-commerce businesses to fight fraud at scale and reduce RTO by a significant margin. Our goal has always been to actively solve business problems through innovative technological solutions that can transform the Indian economy”.
Shashank Agarwal, Founder of Thirdwatch said, “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.”
According to industry estimates, the Indian e-commerce industry is expected to reach $150 billion by FY20. Fraud and RTO can result in losses of over $5 billion for these companies, since 4-5% of all orders fall under these categories.
Thirdwatch AI’s tech, which is aimed primarily towards ecommerce businesses, uses mini models, global signals and an ensemble of AI algorithms to accurately profile fraudulent behaviour. Additionally, the company deploys real-time machine learning to prevent fraud and abuse for web-scale businesses.
Razorpay more recently picked up $75 Million in a fresh round led by Sequoia Capital and others. It had mentioned that acquisitions could be one of the focuses of the freshly raised capital. Along with that, the company plans to targets the MSME (Micro, Small and Medium Enterprises) segment, which includes small and medium businesses, by providing them with means to accept payments from other countries.