Razorpay sees valuation surge sevenfold this year, raises $ 375 million

BENGALURU : Bengaluru: A provider of financial services and digital payments, Razorpay has raised its second major funding round this year. The $ 375 million round is part of its Series F fundraiser, co-led by hedge and private equity firms Lone Pine Capital, Alkeon Capital and TCV.

With this fundraising, Razorpay is now valued at $ 7.5 billion, a sevenfold increase in its valuation since the start of 2021, when the company was valued at just over $ 1 billion. This makes Razorpay the most popular private fintech company in India and the second most popular Indian fintech after One97 Communications Ltd, owned by Paytm.

Existing investors, including Tiger Global, Sequoia Capital India, GIC and Y Combinator, also participated in the round, the company said.

With the current increase, Razorpay has accumulated a total of $ 741.5 million in equity investments since its inception in 2014.

According to co-founder and CEO Harshil Mathur, Razorpay will use the funds to create and develop comprehensive financial service offerings for businesses. It will also examine inorganic growth opportunities and acquire companies in the business-to-business (B2B) software segment that cater to micro, small, and medium-sized enterprises (MSMEs).

The company will also double the space for direct overseas remittances and actively seek to add new insurance offerings for businesses, outside of health insurance.

The company first entered financial services by launching neo-banking and lending solutions, Razorpay X and Razorpay Capital, in 2018.

“Razorpay has grown rapidly over the past 2-3 years. Along with banking services and loans, there is a complete financial stack (for Razorpay). Besides payments, companies now use several services from Razorpay, which gives investors a lot of confidence. In addition, we are very focused on the B2B opportunity as well as on the economy of our unit, which leads to investor conviction on the sustainability of our growth ”, said Mathur of the new fundraising, in an interview with mint.

“Our funding is not based on vanity measures, but on the income and potential opportunities that we create through new forays,” Mathur added.

The company has also invested in B2B logistics provider, Shiprocket and small business advisory platform MSMEx, to date.

Recently, in order to strengthen its financial services offering, Razorpay launched a new range of products, notably “RazorpayX Tax Payment Suite” to mark its entry into the business tax payment space.

Since its launch, the firm’s financial services offerings represent 30% of its overall activity. Mathur declined to comment on the startup’s revenue and overall profitability timeline.

Currently, nearly 25,000 companies have subscribed to the Razorpay X offer, the lending platform allowing ??600 crore – ??800 crore in loans every month, confirmed Mathur.

mint reported on Dec. 10 that the company now plans to embark on larger loans and launch a line of credit for small businesses next year.

“We are delighted to support Harshil, Shashank and the entire Razorpay team. We believe they are building the next generation banking and payments platform in India, and we look forward to supporting them in their mission and further expansion. We couldn’t be more thrilled to be part of this founding team, ”said John Doran, General Partner at TCV.

The Bengaluru-based fintech is also planning international expansion in 2022 and appears to have a presence in Southeast Asia by the first half of next year.

Razorpay first entered the Indian Unicorn Club in October 2020, after the company raised $ 100 million led by GIC and Sequoia India, and was valued at just over $ 1 billion. It quickly tripled its valuation to $ 3 billion in six months, after raising $ 160 million in April of this year. He then raised an undisclosed amount from Salesforce Ventures in September of this year.

The company recently claimed that it processes a total value of payments worth $ 60 billion and feeds payments to 8 million businesses on an annualized basis through its platform. The company expects that number to reach $ 90 billion by the end of 2022.

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