Razorpay gets $160 mn funding, valuation trebles in less than 6 months


Mumbai: Razorpay said it has raised $160 million from Sequoia India and Singapore-based GIC in a funding round that has trebled the valuation of the payment gateway startup to $3 billion in less than six months.

Existing investors Ribbit Capital and Matrix Partners also participated in the funding round, underscoring the massive interest among risk investors in India’s fast-growing fintech and digital payments industry.

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The Bengaluru-based company had joined the unicorn club of startups with over a billion-dollar valuation last October,
when it raised $100 million at a valuation of just over $1 billion in a round co-led by Singapore’s sovereign wealth fund GIC and Sequoia Capital.

Razorpay is among the fastest startups to see a meteoric increase in its valuation.

Other fintech companies such as credit card payments platform
Cred, merchant payments solutions company
Pine Labs and stock broking app
Groww have also registered rapid bump up in valuation.

The company, which offers payment, lending, and banking solutions for merchants and enterprises will use the newly infused capital to expand in South East Asian markets such as Malaysia, Indonesia and Singapore, Chief Executive Officer Harshil Mathur told ET.

ET
was the first to report on this funding in its February 25 edition.

The company is also in the process of acquiring an enterprise Software-as-a-Service (SaaS) firm for merchant management and will hire about 600 people both in India and overseas to grow its neo-banking business, which in recent months has seen considerable traction, said Mathur.

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Razorpay is a payment service provider that helps businesses automate collections through its gateway service, while helping small businesses manage money flow. Its clients include food delivery platforms Swiggy and Zomato, as well as Facebook, Cred, ICICI Prudential and Ola.

In addition, the company said it provides payment solutions to over five million small merchants. While its neo-banking platform, Razorpay X, which helps merchants run current accounts and access credit from partner banks, processes loans worth Rs 700-800 crore every month. The company also offers corporate credit cards in tie-ups with licensed lenders to startups in need of working capital.

Commenting on the valuation boost, Mathur said that there is money aplenty for fintech startups that are managing their unit-economics well, but investors are steering clear of early-stage startups with riskier business models.

Unlike peers Cred and Pine Labs, which also recently entered the unicorn club, Mathur said that Razorpay has no plans yet to apply for a lending licence. “We want to focus on our strengths which is a tech and platform solution for enterprises looking to solve their banking needs,” he said.

The company has already raised $206.5 million in four investment rounds since its inception in 2014. It received $75 million in series C funding in 2019 led by Ribbit Capital and Tiger Global.

The fintech competes with BillDesk, CC Avenues, Paytm and PayU in the payment gateway business, and with others such as Jupiter, Niyo and Open in the business of neo-banking.



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