U.S payment major Stripe INC announced on Wednesday that it is all set to acquire Bengaluru based reconciliation specialist startup Recko for undisclosed amount. The deal is subjected to customary closing conditions. The acquisition marks Stripe’s first-ever acquisition in India. The American and Irish Fintech major has been ramping up its investment and hiring process over the last few years. In March this year, Stripe became America’s most valued startup, valued around $95 Bn following its $600 Mn fundraise. In fact, today it happens to be one of the most valued startups in the world.
Recko’s acquisition will help the Irish and American startup to beef up its presence beyond its core offering of payment processing. Off late, Stripe has been on a acquisition spree in a bid to add new earning streams and ramp up its valuation.
Following the acquisition, Recko’s entire team will join Stripe’s remote engineering hub while Recko’s existing customers will get to use their products as before. Stripe has specifically said in its statement it will soon automate Recko’s reconciliation payments.
The ‘reconciliation area’ in the financial world is widely considered to be a tricky area, though the area is widely considered to be lucrative one. By adding Recko, Stripe will get to add another vertical to its payment stack and help in establishing itself as a full-fledge financial company. Moreover, it may help the Fintech major in bumping up its valuation before its much anticipated IPO in 2022.
Stripe’s attempts to establish itself as a full-fledge financial company is nothing new. Most fintech companies are busy in trying this out as sustaining solely on payment operations is unsustainable. This is clearly visible in the way payment majors Paytm, PhonePe and BharatPe have diversified into other financial services like lending and financial payments.
Recko was founded in 2017 by Prashant Borde and Saurya Sinha. The startup has till date mopped up $7 Mn through seed and Series A round. Last year, the Bengaluru based startup had raised $6 Mn in a Series A round.