Razorpay, one of India’s fintech company, has joined the unicorn club after raising a whooping sum of $100 million in a new funding round. The payment processing begins on Monday.
The Bangalore-headquareted Start-up has, in recent years, experienced drastic growth. Razorpay now has five million merchants compared to one million in 2019.
Singapore’s sovereign wealth fund, GIS, and Sequoia India, co-led the new financing round, a series D.
Co-founder and chief executive, Harshil Mathur, told in an interview that the new round valued the company at a little more than $1billion.
Razorpay $100 million funding – How did it happen?
Razorpay’s total raise is currently $206.5 million. This was as a result of the participation from existing investors; Tiger Global, Ribbit Capital, Y Combinator and Matrix partners.
These are the activities Razorpay performs. They accept, process and disburse money online for small businesses and enterprises. Razorpay expanded its offering by providing loans to businesses and they also launced a neo-banking platform to issue corporate credit cards, among other products.
Razorpay’s early team consist of eleven people. They all shared the same apartment as the co-founder met with more than one hundred bankers in order for banks to work with them.
The meetings they had did not produce positive results for a long time and this made the co-founder feel helpless. This was because they were explaining the same problem they had to investors over and over again. They made this revelation in an interview last year.
Despite the setbacks, Razorpay has become a huge success today. The company has become the largest payments provider for businesses in India as revealed by Mathur.
Razortech, which competes with Prosus ventures’ PayU, accepts several payment options including debit cards, credit cards, mobile wallets and UPI.
A few of Razorpay’s clients are Oyo, Cred, Zomato and Swiggy, Facebook, Zilingo, Yatra, Goibibo and Airtel.
The Company expects to process about $25 billion in transactions (Up five times from last year) for nearly 10 million of its customers this year, said Mathur.
Mathur attributed some of the Company’s rapid growth to the coronavirus pandemic, which he said has accelerated the digital adoption among many businesses.
Concerning the neo-banking and capital side, Mathur revealed that, Razorpay expects RazorpayX and Razorpay Capital to account for about 35% of the startup’s revenue by the end of March next year.
He said that, the Company’s payment processing service continues to be its fastest growing business and does not need much income to grow, so the startup will be deploying the fresh funds to expand its neo-banking offerings to include vendor payment, expense and tax management and other features.
Marthur also said that, the startup, which goals is to work with more than 50 million businesses by 2025, may also purchase a few firms as it explores profit around inorganic expansion in the neo-banking category.
“We will continue to make an impactful contribution to the growth of the industry, aid adoption in the under-served markets and drive new practices and a new thinking for the industry to follow. And this investment fits perfectly with our growth strategy,” he said.
Regardless of the corona virus pandemic, six startups in India, including Pine labs and Unacademy have secured the unicorn. As regards the effect of the pandemic, the outbreak of virus delayed its annual targets by around two months while other sectors such as travel, entertainment, and lending are yet to recover perfectly.
Image Credits: Razorpay