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Razorpay, the payments and fintech Unicorn has raised $160 million in Series E round co-led by existing investors, Singapore’s sovereign wealth fund GIC and Sequoia India, at a valuation of $3 billion. Existing investors Ribbit Capital and Matrix Partners also participated in the funding round.

In Oct 2020, Razorpay secured $100 million in a round led by GIC and Sequoia India at a valuation of over $1 billion. By far, the start-up has raised $366.5 Mn since its launch in the year 2014.

The valuation makes Razorpay the 3rd most valuable fintech firm in the Indian startup ecosystem. PhonePe was valued at $5.5 billion during a funding round in Dec 2020, and One97 Communications Ltd, the owner of Paytm, is valued at $16 billion. With the recently raised funding, Razorpay is going to increase its footprint in Southeast Asia, including the Philippines, Vietnam, Indonesia and Malaysia, to offer its core payment gateway service in these markets by the tip of the year 2021.

Right now, Razorpay is also planning on acquiring software-as-a-service platforms and add capabilities like treasury management, compliance-related remittances, business reconciliations and real-time reporting to expand its suite of products for small and medium enterprises. The start-up is also going to use the freshly raised capital to strengthen its neo-banking business Razorpay X and its lending platform Razorpay Capital, which contribute nearly 30% of its revenue. Both services were launched over 2 years ago.

Harshil Mathur, chief executive officer and co-founder, Razorpay, said, “In just last year alone, we’ve on-boarded about 700,000 merchants on our platform, and seen robust growth across our Razorpay X and Capital verticals. However there’s a lot of work to be done; we think we desperately need to develop new banking technologies that meet the rising demand. So, we are planning to use the funds to further expand our banking and lending products.”

Razorpay Capital has boosted up monthly credit disbursement from ₹300 Cr to ₹800 Cr through partners within one year. More than 15,000 merchants subscribe to Razorpay’s neo-banking solutions now, compared to 5,000 in the year-ago period.

The payments business, Razorpay, currently processes payments worth $35 billion yearly and plans to amp up to $50 billion by the end of this year. It has around 5 million small businesses as customers. Currently, the Bengaluru-based startup, which has around 1,300 employees, is in the process of hiring another 600 skilled professionals to expand.

Mathur said in an interview, “We will start going deeper in existing verticals of neo-banking and credit and try to provide tax-related payments, including compliance payouts, with a goal of creating a single app for businesses to manage their finances and payments. For credit, our strategy is still to provide small size loans and smaller tenure loans to small businesses, whereas increasing the frequency.”

Razorpay has stated that its payment business continues to break even. But the company expects its credit and neo-banking businesses to contribute to 50% of revenues within the next 2-3 years. According to different statistics from data intelligence platform Venture Intelligence, the total number of investments in Indian startups during the first quarter of the year 2021 hit a 2 year high of $4.2 billion.

Till the first week of April, ten startups reached a valuation of $1 billion or more. Fintech startups as credit card bill payment platform Cred and investment platform Groww were the newest additions to India’s ever-growing league of unicorns, achieving a valuation of $2.2 billion and $1 billion, respectively, earlier this month.

Online Team AsiaTech
Online Team Asia Tech is a team of Journalists, Entrepreneurs, and Enthusiast Writers who contribute to the platform by bringing everyday stories, updates, opinions and insights from the Asian Startup Ecosystem.

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