On Monday, Indian venture Razorpay raised $160 million in its Series E funding round, which valued the startup at $3 billion. In October 2020, in the Series D funding, it raised $100 million, which valued it at $1 billion.
About Razorpay- Profile
It is a six-year-old Bangalore-based fintech startup that topped a $1 billion valuation last year. It had become the first Y Combinator-backed Indian Startup to reach the much sought-after Unicorn member. Witnessing exponential growth in less than months since the Indian venture has tripled its valuation and is rearing to launch services in the Southeast Asian markets soon.
Razorpay accepts, processes, and disburses money online for small and medium businesses. It offers solutions somewhat as Stripe does in the US and several other developed markets.
But Razorpay is wider and goes much further than Stripe. It has launched a neo banking platform to issue corporate credit cards. It also offers businesses working capital to let SMEs function seamlessly.
It offers several value-added services such as automating vendor payments, analytics, managing subscriptions, GST invoicing, designing, real-time reconciliation, and creating websites. The startup has also developed an application-based substitute for payment terminals, also termed as POS, as well as pay-by-link for enabling seamless and smooth offline trading and commerce.
The Co-founders Mathur and Shashank Kumar met at IIT Roorkee college. Both of them realized early on that small business facing immense hardships in accepting money online and the existing payments processing firms weren’t designed to tackle the needs of SMEs and budding ventures.
This year’s funding round has been co-led by existing investors Singapore’s sovereign wealth fund- GIC- and Sequoia Capital India. Some other existing ones namely Ribbit Capital, which takes Razorpay to date raise to $366.5 million.
The report by TechCrunch states that CEO and Co-founder of Razorpay Harshil Mathur said- With the global giant Stripe still nowhere in the Indian picture, Razorpay has grown to become the market leader. And now, the startup plans to replicate its success from the home country in Southeast Asian markets.
He added- “We are one of the largest payments providers in the Indian ecosystem. We want to take the learnings we have in India to the Southeast Asian market. Before the end of the financial year, we want to launch in one or two Southeast Asian markets,” that the new round gives it the valuation to more confidently explore some M&A opportunities to accelerate growth”.
The live instance of Razorpay’s growth is once Deepak Abbot, co-founder of Indiagold, recently recalled an incident where his venture had missed an alert, and that coupled with a snafu at the bank resulted in the startup running out of funds to pay customers.
Meanwhile, Mathur said Razorpay X serves about 15,000 businesses, up from fewer than 5,000 in October 2020. The company is now annually bandying out $800 million to the clients, up from less than $40 million a year ago. Moreover, the duration of the loan Razorpay offers ranges from three to six months, and the ticket size is typically 0.8 million to 1 million that is around $10,730 to $13,400.
The founder said- “If it was just the payments processing business, we could go public right now. But our ambitions are beyond — to become the full ecosystem for businesses. And on those new sides (neo banking and lending), we are early”.