India’s aggressively growing FinTech Startup valued at $7.5 billion after fresh capital infusion

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Razorpay is valued at $7.5 billion after fresh funding of $375 million making it the most valued Fintech startup in India after Paytm while overtaking Walmart-owned digital payment firm PhonePe.

Razorpay’s valuation has jumped over 7.5X in the last 15 months as it aggressively expands its business both vertically and horizontally. It is aggressively growing while broadening its product offering. It has raised a total of $741.5 million in investments since its inception in 2014. Razorpay was valued at $1 billion in October 2020 and $3 billion in April 2021

The latest series F funding round was co-led by Lone Pine Capital, Alkeon Capital, and TCV. Existing investors like tiger global, sequoia capital, GIC, and Y combinator participated.

“We’ve come a long way in these seven years, and more so since 2020,” said Harshil Mathur, CEO and co-founder of Razorpay. “Moving forward, we believe we will radically change how payments and banking are done in nearly every sector of India.”

“Razorpay is set to create a larger dent in the fintech universe, and with the help of new acquisitions and partnerships, we will be able to build an A-class financial service infrastructure for India’s businesses,” Mathur stated.

“We clocked over 300 per cent y-o-y growth, second year in a row. We are looking at achieving break-even on an overall level in 2-2.5 years and will look at the IPO route in 2.5-3 years,” he added.

The infusion is to be used to scale RazorpayX, Razorpay business banking suite and offer new banking solutions in 2022 to help businesses solve their compliance and operational challenges. Razorpay might open a neo bank shortly as well. The financial solution company is poised to become a giant as it plans to invest in acquisitions in 2022 and expand its presence across the APAC region. It will also hire over 600 employees to fuel its growth plan in India and abroad.

Razorpay started as a payment processing company that accepts, processes and disburses money to small enterprises and businesses using its highly versatile payment gateway. It also operates as a neo banking platform, through which it offers credit card and working capital businesses. Its international payment gateway supports over 90 countries presently as it grows. Razorpay has expanded its portfolio since then. It started providing solutions that help enterprises manage tax and compliance disbursements, generate payment links, subscription plans with automated recurring payments, and automatically reconcile incoming transactions using virtual accounts and UPI IDs.

Razorpay offers similar services to Stripe, which has an immense presence in Europe and the US. However, it has disrupted the Indian market by aggressively catering to India’s massive demand for payment processing. It processes over $60 billion in transactions annually and has over 8 million businesses with a target of reaching $90 billion in total payment volume by the end of 2022. Interestingly, out of the 42 startups that have become unicorns in 2021, 34 use Razorpay.

As Razorpay grows at an aggressive rate, it will soon be IPO – ready, but the decision to go public would rest in the hands of founders and investors.

“As the leading online payments player in the rapidly accelerating Indian digital payments market, Razorpay has continued to innovate and blaze new trails,” said Deepak Ravichandran, General Partner at Alkeon Capital, in a statement.

“With a broad set of products across payments, banking, and software that provide a seamless end-to-end experience for merchants (who have been historically underserved by legacy payment providers) and geographic expansion on the horizon, we are thrilled to be partnering with Harshil, Shashank and his team who have continued to execute on their vision. We could not be more excited for the journey ahead.”

Razorpay proves how FinTech is a huge market and opportunity in India; many other fintech startups are following the path of Razorpay and disrupting the traditional finance industry in India.

We hope to see many more unicorns in Finance and Technology in the next 2-3 years.

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