E-commerce remains one of the most important technological potentials in India which is one of the world’s most populous countries, whose economy is continuously evolving and now is a home to the largest Internet users. And today, a startup in this field has raised a round of funding, with the goal of making it easier to accept and make payments online.
The startup — whose services are similar to those of Stripe, the global payments behemoth with little to no footprint in India has secured $375M in its Series F financing round. The funding round was co-led by Lone Pine Capital, Alkeon Capital and TCV.
The latest round included existing investors Tiger Global, Sequoia Capital India, GIC, and Y Combinator. Approximately in the last seven years, Razorpay has raised over $740M.
To fuel its growth in India and Southeast Asia, the startup plans to continue to focus on growing its product offerings and hire over 600 people.
By using an API, the Bengaluru based startup Razorpay has created a payment gateway that allows businesses to swiftly incorporate payment services into their websites and apps.
How does Razorpay function?
Razorpay accepts, processes, and disburses funds to small businesses and enterprises. It also has a neobanking platform, which it uses to provide corporate credit cards and working cash to businesses. It also has an international payment gateway that accepts more than 90 different currencies.
Helping businesses collect tax and compliance disbursements, generating payment links that can be shared via email or instant messaging services, subscription plans with automated recurring transactions on various payment modes, and automatic reconciliation of incoming transactions using virtual accounts and UPI IDs are just a few of its other services.
Razorpay claims to have over 8M customers, including Facebook, Swiggy, Cred, National Pension System, and Indian Oil, and processes $60B in transactions annually (up from $5B in 2019). Razorpay is used by 34 of the 42 Indian firms that have become unicorns this year.
“Our payments division continues to grow in strength. We’ve also been able to prove our thesis on neobanking and lending in the previous year and a half,” said Harshil Mathur, co-founder and CEO of Razorpay.
“We want to make sure that when you create a business and sign up with Razorpay, we take care of everything from opening a bank account to setting up payments, disbursals, and salary distributions.” He went on to say, “You don’t have to go out and utilise multiple tools.” Razorpay expands in tandem with these enterprises, he claims.
IIT Roorkee college is where Mathur and Shashank Kumar (co-founder of Razorpay) met and this idea germinated. Small businesses in India experienced numerous issues collecting money digitally at the time, and current payment processing corporations were not focused on their needs.
In the early years of the company, the co-founders battled to persuade financiers to collaborate with them. The meetings were slow, and the co-founders felt helpless as they repeatedly explained the same problems to investors.
Razorpay, which recently introduced a feature that saves shoppers’ information — passwords, credit card numbers, and addresses — during their first purchase and prefills them when they transact with the same business or any other that uses Razorpay to process payments, is not looking to provide a consumer-friendly service.
Razorpay is also preparing for an IPO, he said, but he added that the company won’t be going public for at least two and a half years.
In a statement, Deepak Ravichandran, General Partner at Alkeon Capital, said, “As the leading online payments operator in the fast increasing Indian digital payments market, Razorpay has continued to innovate and carve new trails.”