Razorpay Raises $160 Mn led by Sequoia Capital and GIC; Triples its Valuation to $3 Bn in 6 Months
Mumbai: After being crowned a Unicorn a few months ago in October 2020, Razorpay, India’s leading Payments and Business Banking platform, today announced its Series E fundraise of $160 Million. This financing round has tripled the company’s valuation to $3 Billion in less than six months, signalling one of the fastest increases in valuation for an Indian Unicorn.
This round was co-led by Sequoia Capital and GIC, Singapore’s sovereign wealth fund, along with participation from Ribbit Capital and Matrix Partners. Razorpay plans to infuse the freshly raised capital to scale up its Business Banking suite, invest in new Acquisitions and launch in International markets such as South-East Asian countries. The Fintech Unicorn is already hiring more than 600 employees to fuel its growth plans.
Razorpay helps small businesses and large enterprises modernise their financial infrastructure by providing intelligent automated payment and business banking solutions to manage their money flow end-to-end, so that it frees up entrepreneurs, heads of business, technology & finance functions, and enables them to concentrate on cultivating their niche, no matter how small or big. The new funding gives Razorpay a total of $366.5 Million in investments since its inception in 2014, that includes its recent raise, a $100 Million in Series D in 2020.
Commenting on the company’s meteoric rise in the Fintech ecosystem, Harshil Mathur, CEO and Co-founder of Razorpay, said, “We at Razorpay want to be the one-stop financial platform that a business needs to simplify and manage their end-to-end money movement. We have made some strides towards that journey, our recent initiatives in the Banking and Lending space through RazorpayX & Capital have helped businesses solve for some very unique challenges around managing money, empowering businesses to grow upto 10X in spite of an economically difficult year. But there’s more work to be done, we believe there’s a dire need to develop new banking technologies that meet the rising demand. And so we plan to use these funds to further expand our banking and lending product suite so that we not only provide a better experience to businesses and their customers but significantly contribute to the growth of our partner businesses.”
He added, “We are delighted about reaching a significant milestone today, we couldn’t be more proud of what the team at Razorpay has achieved. We are geared up to make an impactful contribution to the industry and aid adoption in underserved markets. We’re really happy to have continued faith and encouragement from GIC, Sequoia Capital India, and our other investors and we believe this investment will build a cutting-edge payment and banking ecosystem for India and the world and new thinking for the industry to follow.”
Investing in Building New-Age Business Banking Solutions and Unlocking Growth for SMBs
The company’s neo-banking platform, RazorpayX is changing the business of banking rapidly and intelligently, powering over 15,000 Indian businesses to manage their money. The neobank saw 400% growth in transaction volume in the last 12 months of Covid. In order to meet the increasing demand and creating value for the financial needs of businesses, a portion of the funds raised will be invested in RazorpayX to roll out new tailored products built on the latest technology stack. These products will be designed to enhance convenience, security, manage expenses better and help minimise a company’s financial risk in an increasingly uncertain digital environment.
Businesses like Cred, Mobile Premier League (MPL), Dunzo among others have turned to RazorpayX in the last few months and are reaping the benefits of instant refunds and payouts to their customers and vendors, current accounts, real-time financial summaries enabling control and visibility of their finances, automated payroll payments, group health insurance and working capital loans. The company has been disbursing credit of upwards of 700Cr per month, helping Entrepreneurs get access to working capital, and now plans to scale this up to INR 1000 Cr per month by the end of 2021.
Bolstering International Operations, Foray into South-East-Asian Countries
Apart from product expansion, Razorpay is also looking at global expansion. The company believes that the payment problem is more dominant in developing countries than developed countries. India’s unique landscape has enabled a digital payment ecosystem that has leapfrogged legacy methods that were heavily dependent on cards.
Razorpay’s experience in building innovation for a market as diverse as India, can solve a range of Fintech challenges in the SEA markets. Today, geographies like South East Asian (SEA) countries face similar payment issues like India and Razorpay will look to leverage its leadership in building intelligent payment products and learnings to ripe markets like South-east Asian countries. The company has been working on market research, understanding the payment needs of SEA businesses and plans to hire on-ground teams in building a payment acceptance layer and work with multiple stakeholders on product customisation.
New Acquisitions & Strategic Partnerships to Strengthen its Business Banking Offerings
Having witnessed phenomenal demand from SMEs looking to automate their financial operations, Razorpay will be on the lookout for B2B Financial Saas startups operating in sectors such as SME credit, Accounting & Taxation, Accounts receivable and Expense Management, so that these acquisitions and strategic partnerships can help serve its merchant base better. In 2021, Razorpay plans to double down investment in acquiring B2B SaaS companies that can help scale up operations while providing the highest standards of customer experience in the country.
Commenting on the company’s acquisition strategy, Shashank Kumar, Co-Founder & CTO, Razorpay, said, “Being a technology-first company, we’re always evaluating products and technologies that automate long and arduous money movement, accounting and other banking processes, thereby allowing businesses to focus more on their growth. In the next 12 months, Razorpay will look to introduce 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.”
In 2019, Razorpay acquired two companies – Opfin, a Payroll and HR Management Software company, to solve for seamless automation of a business’s entire payroll process and Thirdwatch, an Artificial Intelligence (AI) driven company specialising in big data and machine learning for real-time fraud prevention.
Commenting on Razorpay’s Series E fundraise, Choo Yong Cheen, Chief Investment Officer for Private Equity at GIC, said, “We are delighted to strengthen our partnership with Razorpay, which has demonstrated strong growth momentum while continuing to innovate across its core payments, banking and lending solutions. As a long-term investor, GIC looks forward to supporting Harshil and Shashank for the company’s next phase of growth.”
Ishaan Mittal, Principal, Sequoia India commenting on the funding said, “We expect digital payments to become a $500Bn+ market over the next 4-5 years. The Razorpay team, with their constant focus on executional excellence, has grabbed early leadership in this space. Their triad of payment, banking and lending products has made them the go-to for businesses looking for end-to-end online solutions, and positioned them as the central nervous system for India’s digital economy. Sequoia Capital India is privileged to be partners in this journey and excited to deepen the relationship through this new round of funding.”
In the last six months, Razorpay has witnessed a 40-45% growth, month-on-month. Currently, the company has achieved $40 Bn TPV (Total Payment Volume) and aims to further solidify its position as one of the largest full-stack fintech companies in the country. Razorpay currently powers payments for over 5 Mn businesses including the likes of Facebook, Airtel, Ola, Zomato, Swiggy, Cred, ICICI Prudential among others and is all set to reach 200 million customers by 2021.