Razorpay, a prominent fintech unicorn specializing in payment and banking solutions, has made an acquisition to bolster its offline payment offerings. The company has purchased BillMe, a Mumbai-based startup focused on digital invoicing and customer engagement. This move is part of Razorpay’s strategy to expand its suite of offline payment products, following its entry into this space in July of the previous year when it acquired Ezetap, a Point of Sale (PoS) device manufacturer, for $200 million.
Razorpay’s portfolio now includes three types of devices: Android Smart PoS, Android Smart Mini PoS, and a mobile device. By integrating BillMe’s technology, Razorpay aims to empower its device users and offline merchants to create digital invoices, replacing traditional paper bills. This streamlined process enables businesses to adopt digital invoicing within minutes, as opposed to the time-consuming month-long processes that were previously required, and it requires minimal technical expertise from the merchant’s side.
In a statement, the company said Razorpay-generated digital bills (powered by BillMe) will enable merchants to engage better with their customers as they would be able to undertake feedback and surveys via these digital bills. In addition, the stack comes with a dashboard that would allow merchants to analyze customer behavior and establish custom campaigns along with cross-sales.
Razorpay MD and Co-founder Shashank Kumar terms the global digital receipts market as a $2.3 billion opportunity by 2027.
“We aim to anchor this opportunity for businesses and help them stand out by engaging and retaining their customers better while strengthening their marketing capabilities. Through such digital bills, their associated dashboards, and analytics behind them, we plan to scale up a simple bill into a multidimensional tool for merchants to understand, engage, and target their customers much more effectively,” Kumar said.
For consumers, digital bills offer several advantages, including faster checkouts, reduced paper consumption, and the elimination of issues related to misplacing physical bills for future reference.
BillMe, a startup founded six years ago by Jai Hemrajani, Kuber Pritmani, and Rupam Jain, has already provided its technology to over 4,000 businesses, managing more than 15,000 retail PoS systems for well-known brands such as McDonald’s, Burger King, Decathlon, Baggit, Relaxo Footwear, and Cinepolis, among others.
“We have established ourselves as the trusted partner for retailers in all things related to digital invoicing and post-purchase customer engagement. Through tech innovations, we have enhanced customer experience and provided retailers with valuable data insights to cement BillMe as the pioneer in this industry,” Pritmani said.
This acquisition marks Razorpay’s eighth purchase, and it solidifies the company’s strategy to expand into offline payments, particularly following the acquisition of Ezetap. It also comes as Razorpay faces restrictions imposed by the Reserve Bank of India (RBI) on onboarding merchants for its online gateway business. Among its previous acquisitions, four took place in 2022, including deals with Curlec, a Malaysian-based recurring payments firm; Izealiant, a Pune-based banking technology company; Ezetap, a PoS payments solution provider; and PoshVine, a loyalty and rewards management company.
Offline payments represent a lucrative opportunity for online payment companies, as they seek to diversify their revenue streams and tap into India’s extensive base of offline merchants, whether through PoS terminals or soundboxes, along with other value-added services. Many companies that primarily operate in the online gateway space are striving to become omnichannel players by offering both online and offline payment solutions. Examples include Pine Labs and Mswipe, initially terminal providers that have launched their online gateways, and the payments app PhonePe, which offers both payment gateway services and PoS devices, enabling merchants to accept payments via debit cards, credit cards, and UPI.
In terms of financial performance, Razorpay reported an 18% increase in profit to Rs 7.3 crore in FY22, though it has yet to post consolidated profits. Its total revenue for the fiscal year experienced a substantial 75% growth, rising to Rs 1,485.7 crore from Rs 844.6 crore in FY21. The company, backed by investors like Tiger Global, Sequoia Capital India, GIC, Lone Pine Capital, Alkeon Capital, and TCV, was valued at approximately $7.5 billion in its most recent funding round in December 2021.