Razorpay, India’s first full-stack financial solutions company, on April 19, 2021, revealed it had secured USD 160 million in a funding event from Sequoia Capital, GIC, and others. This tripled the valuation for the payment solutions company to USD 3 billion.
The fund was raised in a Series E funding round co-led by Sequoia Capital and GIC and witnessed participation from global venture capital firm Ribbit Capital and Matrix Partners, a private equity investment firm.
Based in Bengaluru, India, Razorpay successfully delivers intelligent automated payment and business banking solutions to aid organizations in managing their money flow end-to-end.
With the recent round of funding, Razorpay has managed to secure USD 366.5 million.
Razorpay CEO and Co-Founder Harshil Mathur stated, “We will use the capital to scale up our Business Banking suite, invest in new acquisitions and launch in International markets, including South-East Asian countries.” He added that the company will also continue to hire aggressively to fuel further its growth plans.
The Coronavirus pandemic has significantly boosted tech-oriented start-ups, with a substantial surge in consumers opting for e-services such as digital banking, e-commerce, and online classes. This is one of the essential factors driving greater investor interest in such businesses.
RazorpayX records 400% growth
CEO and Co-Founder Mathur expressed that the company’s neo-banking platform called RazorpayX witnessed a 400% surge in transaction volume in the last 12 months.
However, to cope with the skyrocketing demand and create value for businesses’ financial needs, some portion of the fresh funds will be invested in RazorpayX to develop new customized products on the latest technology stack.
Additionally, Mathur noted that these products would be designed to “enhance convenience, security, manage expenses better and help minimize a company’s financial risk in an increasingly uncertain digital environment.”
Traveling in the same direction, Razorpay has disbursed credit worth INR 700 crore per month to aid entrepreneurs to access working capital, and now the company plans to raise the amount to INR 1,000 crore a month by the end of 2021.
On the global expansion front, the CEO states, Razorpay’s experience in innovation for a market as varied and diverse as India has the base to resolve a range of fintech-related challenges in the South East Asian region. He further quotes, “Geographies like South East Asian (SEA) countries face similar payment issues like India, and we are looking at launching in one or two markets in the region before the end of the fiscal.”
Surge in hiring
Post the funding round, Razorpay has plans to increase the on-ground teams in developing a payment acceptance layer and collaborate with several stakeholders for product customization.
The fintech enterprise is also looking for B2B financial SaaS (software as a service) startups operating in the SME credit, expense management, accounting and taxation, and accounts receivable genre.
Mathur mentions, “We will look at introducing more such products, through strategic partnerships and acquisitions which fit into our vision of making financial infrastructure easy and available to businesses across the country.”
Last year in 2019, the company made some interesting acquisitions by taking over Opfin, a Payroll and HR Management Software company, and Thirdwatch, an Artificial Intelligence (AI) powered company with expertise in machine learning and big data real-time fraud prevention.
Ishaan Mittal, Principal at Sequoia Capital India, said digital payments is expected to become a USD 500 billion-plus market over the next 4–5 years. “Sequoia Capital India is privileged to be partners in this journey and excited to deepen the relationship through this new round of funding,” Mittal added.
The performance check
Razorpay has experienced a 40–45% growth in the last six months on a month-on-month basis. Currently, the company has gained a USD 40 billion Total Payment Volume.
To add to its elaborate portfolio, the company at present powers payments for more than 5 million businesses, including industry giants such a Facebook, Zomato, Airtel, Ola, Cred, ICICI Prudential, and Swiggy among the long list and aims to target 200 million customers by the end of 2021.