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Razorpay has become the first Indian fintech start-up to triple its valuation to $3 billion, with its latest $160 million Series E fund raise, in less than six months after it became a Unicorn in October 2020.
The latest round was co-led by existing investors GIC, Singapore’s wealth fund, and Sequoia India along with participation from Ribbit Capital and Matrix Partners. The new funding gives Razorpay a total of $366.5 million in investments since its inception in 2014, including its $100-million Series D round last October.
“Our valuation has tripled primarily on the back of growth we have seen in the last six months. In FY21, we grew 3x. While our payments business has grown very rapidly, we have seen great traction on some of our new launches — RazorpayX, our neo-banking platform, and Razorpay Capital, our lending platform, both of which contribute to 35 per cent of our revenue. On the lending side, we have grown from lending ₹150 crore/month to ₹800 crore/month in the last 12 months. We have scaled from fewer than 5,000 merchants on Razorpay X to 20,000 at present,” Harshil Mathur, co-founder and CEO, Razorpay, told BusinessLine .
“We are not valued as a payments company any more, we are valued as a full-stack financial services company. And our vision is to be the one-stop financial platform that a business needs to simplify and manage their end-to-end money movement,” added Mathur.
Usage of funds
The fresh capital will be used to scale up its business-banking suite, invest in B2B financial SaaS start-ups and launch in high-growth South-East Asian countries like Indonesia, Malaysia, Vietnam and the Philippines. To support this growth, the start-up is hiring 800 people for India and 50 for international expansion.
Razorpay’s inorganic strategy is not about building market share with its acquisitions but to pick innovative products that can scale within the Razorpay umbrella. “We are looking to acquire companies with products that will serve our merchant base better, in the areas of SME Credit, Accounting & Taxation, Accounts Receivable and Expense Management. For example, we acquired Opfin, a payroll and HR management software company, in 2019. It has grown 10x since we acquired them because they have been able to tap into the merchant network we already have. The ticket size of our acquisitions will be in the $5 million to $50 million range,” said Mathur.
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