Razorpay turns unicorn with $100 million Series D funding

The investment was led by GIC and Sequoia Capital, and the startup expects to use the money to grow two new product lines it is building, and add solutions for small businesses.

Harichandan Arakali
Published: Oct 12, 2020 04:57:48 PM IST
Updated: Oct 13, 2020 11:28:53 AM IST

harshal mathurHarshal Mathur Co-founder, Razorpay 
Image: Selvaprakash Lakshmanan

Razorpay, a Bengaluru startup which provides end-to-end payments solutions to businesses, has raised $100 million in its series D round of funding. In the process, the venture has been valued by investors at over $1 billion, making it the latest fintech unicorn in India.
 
This investment round was co-led by GIC, Singapore’s sovereign wealth fund, and Sequoia India, along with participation from Ribbit Capital, Tiger Global, Y Combinator and Matrix Partners. The new funding gives Razorpay $206.5 million in investments since its inception in 2014. The startup raised $75 million in its series C round in 2019.
 
Razorpay, which has grown 300 percent in the last six months, helps businesses modernise their financial infrastructure. It provides intelligent and automated payments and banking solutions so businesses can manage their entire money flow, while they focus more on their strategic functions, the company said in a release on Oct. 12.
 
The company plans to use the new funding to further strengthen and accelerate the development of its two new product lines—RazorpayX, a ‘neo-banking’ (branchless digital banking) platform and Razorpay Capital, its lending arm. It will also invest in new initiatives to help small and medium sized businesses. By the end of the current fiscal, the company expects RazorpayX and Razorpay Capital to contribute to 35 percent of its revenue, with a 100 percent increase in the company’s count of partner businesses. The funds raised will also be used to add an additional 500 employees through the current fiscal year that ends March 31, 2021.
 
“This funding represents a huge endorsement of our belief of powering the financial infrastructure for disruptive businesses, simplifying the entire money flow so that businesses can focus more on disrupting the Indian economy with their new ideas, products and experiences, everyday,” co-founder and CEO Harshil Mathur said.
 
Over the last six months, RazorpayX, the banking platform has witnessed 100 percent growth. The company built the product from scratch to tap opportunities in a nascent but fast-developing space in the Indian market. The product has the potential to become a one-stop platform for a business’ banking needs, according to Razorpay.
 
By 2025, the startup expects to increase the number of its customers ten-fold to 50 million. The fintech market in India was valued at Rs.1,920 billion in 2019 and is expected to reach Rs 6,207 billion by 2025, growing at a compound annual rate of 22.7 percent in the 2020-2025 period, according to an estimate by Research and Markets. Razorpay’s customers today include Airtel, BookMyShow, Facebook, Ola, Zomato, Swiggy, Cred and ICICI Prudential.
 
“India has made significant strides in establishing a digital payments ecosystem and Razorpay has established itself as a clear leader, with its strong focus on customer experience and product innovation,” Choo Yong Cheen, chief investment officer for private equity at GIC, said. “GIC has a long track record of partnering with leading fintech companies globally and is delighted to partner with Razorpay in its journey to transform payments and banking.”
 
“India’s digital ecosystem is seeing unprecedented growth with online shoppers expected to cross 350 million by 2025. This trend of digitization is penetrating India across social strata and geography and Razorpay is playing a pivotal role in this transformation by enabling millions of merchants to accept digital payments in a frictionless and efficient manner,” Ishaan Mittal, Principal, Sequoia Capital India LLP said. “They have expanded the breadth of products and solutions rapidly across payments and banking and are becoming a platform for all financial technology needs of their customers. The Sequoia India team is excited to continue the strong partnership with Razorpay and team in this journey.”

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