Main Highlights:
- Razorpay, headquartered in Bangalore and the market leader in India’s payments processing market, revealed Sunday evening that it raised $375 million in a Series F fundraising round.
- Razorpay is a payment processor for small businesses and enterprises that receives, processes, and disburses cash.
- The company wants to continue expanding its product offerings and adding over 600 employees in India and Southeast Asia to fuel its growth.
Razorpay’s valuation has more than quadrupled to $7.5 billion from $3 billion in April, as one of India’s leading fintech companies continues to expand rapidly and aggressively expand its product offerings.
The Bangalore-based business, the market leader in India’s payments processing market, announced Sunday evening that it had raised $375 million in a Series F funding round. The current round, which provides the business with more funding than its prior financings combined, was led by Lone Pine Capital, Alkeon Capital, and TCV.
Tiger Global, Sequoia Capital India, GIC, and Y Combinator, among others, invested in the new round, according to Razorpay, which has raised more than $740 million in the last seven years.
About Razorpay
Razorpay is a payment processor that accepts, processes, and disburses funds to small businesses and corporations. Additionally, it operates a neo banking platform via which it provides companies with credit cards and working cash. Additionally, it provides an international payment gateway that accepts more than 90 currencies.
Among its other services, it assists businesses in collating tax and compliance disbursements, generates payment links that can be shared via email or instant messaging services. It offers subscription plans with automated recurring transactions on various payment modes and reconciles incoming transactions using virtual accounts and UPI IDs.
The business — whose offerings are comparable to Stripe’s, the global payments behemoth with a negligible to the non-existent presence in India — has also expanded into a few Southeast Asian countries in recent years.
Razorpay’s annual accumulation from transactions
Razorpay, which processes $60 billion in annual transactions (up from $5 billion in 2019), claims to have accumulated over 8 million enterprises as customers, including Facebook, Swiggy, Cred, the National Pension System, and Indian Oil. Razorpay is used by 34 of the 42 firms in India that have achieved unicorn status this year.
Harshil Mathur, co-founder, and CEO of Razorpay stated that their payments business continues to become stronger. They have also demonstrated their neo banking and lending theory over the last year and a half. He stated that they aim to ensure that when a customer starts a business and signs up with Razorpay, they take care of everything financial for them – from opening a bank account to set up payments and disbursements and salary payouts. They are not required to leave the room and employ multiple tools. Razorpay, he explained, expands alongside these firms.
Mathur and Shashank Kumar (co-founder of Razorpay) — shown above — met during their undergraduate studies at IIT Roorkee. At the time, small businesses in India had numerous obstacles to accepting payments online, and current payment processing corporations were not focused on their needs.
Razorpay is now one of India’s most valuable fintech businesses, valued at $7.5 billion, up from just over $1 billion last year. However, getting to this point has not been easy. During the startup’s early years, the co-founders battled to convince financiers to cooperate with them. The meetings were slow, and the co-founders felt helpless after repeatedly articulating the same issues to investors, they recounted in a previous interview.
Kumar stated that they had worked relentlessly to establish Razorpay as a people-first technology and product firm over the last seven years. Since 2014, if there is one thing that the Razorpay team has committed to, it is never to stop reinventing. The business intends to increase its product offerings and hire over 600 workers in India and Southeast Asia to fuel its expansion.
However, Razorpay, which recently introduced a feature that saves shoppers’ information — passwords, credit card details, and addresses — during their initial purchase and automatically prefills them when they transact with the same business or another that also uses Razorpay to process payments, is not looking to offer a consumer-focused neo banking service, Mathur explained.
He noted that while they may conduct some consumer-oriented work, they prefer to avoid pure consumer offers for two reasons. They perceive no meaningful value addition that they can bring to the table that other players in that ecosystem are not already providing. They also see no significant gain from entering that business.
Razorpay is also preparing to go public, he claimed, but the startup would not do so for at least two and a half years. Deepak Ravichandran, General Partner at Alkeon Capital, stated that Razorpay has continued to innovate and break new ground as the market leader in the rapidly growing Indian digital payments business.
