Announcing Razorpay’s $100 Million Series D Funding

Five years ago, when Harshil & I moved to Bangalore to start Razorpay, the startup ecosystem was still nascent and less than a decade old. The mobile and internet adoption had just begun to accelerate. For most businesses, accepting online payments was a major struggle and it was a stumbling block in India’s digitisation drive.

We began Razorpay with a simple vision of helping every business accept digital payments and over the years, we have made huge strides towards making it a reality. Then & now, our commitment lives on – understanding the problems our customers face and building solutions through what we know best – technology.

Through the years, the payments industry has gone through multiple changes. A lot of times, it’s not been easy but we have persevered through the ups and downs and kept our focus on building the solutions we believe are right for our customers. All this, while we continuously keep our focus on achieving our long-term goals.

And that story of perseverance has led me to share something exciting with you today.

I am delighted to announce that Razorpay has secured $100M in Series D financing.

The funding also comes with a major milestone of Razorpay becoming the newest unicorn in India. With this round, we are glad to welcome our latest partner GIC, Singapore’s sovereign wealth fund to the Razorpay investor base. Along with GIC, the round has been co-led by Sequoia with participation from our existing investors Ribbit Capital, Tiger Global, Y-Combinator and Matrix Partners.

GIC is also a great partner at this stage of the company because they are a significant public market investor. They are a major investor in marquee financial companies like Bajaj Finance, Bandhan Bank and many others.

People

Our success till date has been the result of an impassioned bunch of folks and a culture of innovation. From the earliest Razor to the latest hire, we empower everyone to unleash their creative potential aided by our values and our singular focus towards solving ambitious problems.

An advantage of having an A team is that we are eternally driven to improve everything we do for our customers – service, products, cost and much more. It’s not been a story of overnight success and we have experienced multiple failures but that never stops us from going up the difficult terrain. And we as a team are driven every day just to see the delight that we create for the businesses we serve. 

Payments

With COVID causing a potential paradigm shift in the way commerce happens in the country, we are seeing multiple new demographics of businesses looking to move online and start leveraging internet and mobile technology.

We provide businesses the flexible ability to accept payments across multiple channels – whether online, through links, via self-hosted pages or third party branded stores or through a QR code. Serving a heterogeneous and continuous scale of businesses has been a conscious choice of the way we operate. And this allows us to provide access to the most powerful yet extremely simplified financial tools to SMEs while, at the same time, providing cutting-edge and highly scalable financial infrastructure to the established businesses.

We serve international brands including the likes of Facebook, Google and Wikipedia, national enterprises like Jio, Zerodha and Hotstar, recent upstarts like Khatabook, OkCredit or Meesho along with a multitude of SMEs and freelancers.

Razorpay has built India’s most advanced payments infrastructure connecting consumers with businesses irrespective of any payment instrument (100+ at last count). Our growing portfolio of payment products built on the top of payments infrastructure – Payment Links, Subscription, Invoices, Payment Pages, etc. have been a critical partner in the financial journey of millions of businesses.

Our latest payments product – Payment Button – has also been our fastest growing product in the history of the organisation. While we are happy with the above achievement, we are by no means satisfied. Today, 2 out of 3 businesses onboarding on Razorpay are accepting digital payments for the first time and we are committed to further strengthening the payments stack to ensure that no business is left behind in the digitisation drive.

Despite the tremendous growth we’re witnessing in the digital payments ecosystem, online payments still barely account for a meagre 3% of Indian economy. So yes, there’s  a long way to go. I strongly believe that in India’s journey towards achieving the $5 trillion GDP target by 2024, digitization of the economy and Indian businesses is not just a nice-to-have but rather a strong force multiplier.

Neobanking

Since day one, all our decisions are driven with one fundamental goal of serving businesses. Every decision we take is with only one intent in mind, how can we be the growth enabler in the life of a business and empower them to serve their customers better.

In our conversations with businesses, we uncovered multiple financial pain points beyond payment acceptance. The financial technology used by businesses today is fundamentally broken and not suited to the mobile era. As a digital business, entrepreneurs and business owners want to work with a mature financial software that goes beyond being merely transactional. Today, businesses want a singular hub for all financial operations. Period.

To give a perspective, small business owners spend around 60% of their time managing their finances. This time could be better spent in scaling their business, coming up with newer strategies or expanding their product line or market.

The problem is acute enough that it prompted us into launching our neo-banking platform, RazorpayX. Within twelve months of its launch, RazorpayX has served over 10,000 businesses – processing their payroll through Opfin, paying for expenses through Corporate Card and paying their vendors in real time, disbursing billions of dollars through the underlying payouts layer.

Of the 42.5 million SMEs in India, 53% don’t have access to digital financial tools. Beyond this, there is a shortage of billions of dollars of credit for businesses.  SME lending is among the hardest hit sectors during COVID, leaving businesses scrambling for financial cover in their worst time. In a bid to help MSMEs and improve their cash flows, we recently launched a credit-line product, Cash Advance. And in the past six months, we have extended a line to more than 5,000 businesses through our financial partners. All the underwriting has been done only with the cashflow data that businesses generate on our platform. 

While we do this, we are extremely humble in being cognizant that we stand on the shoulder of giants – banks who have been our partners since the beginning. Banks who have pioneered branch banking in the 80s and relationship banking in the 2000s and with whom we will continue to build enduring relationships for years to come.

I like to talk about RazorpayX because we believe it’s inextricably the glue tying together everything we do at Razorpay and our relationship with the businesses. We strongly believe that RazorpayX will charter our next growth chapter – driving the mobile-first, technology- suited to the digital needs of businesses today and helping them make better decisions. 

The road ahead

In the past five years, we have served millions of businesses and helped them accept revenues of tens of billions of dollars. Razorpay is also set to supercharge your business banking to become a unicorn heralding a new age and the next chapter of digital transformation in India that has been seeing tailwinds worldwide.

With all this, however, this funding is just a pit stop to refuel while we strengthen our commitment to simplifying the entire money flow so that our partner businesses can focus more on disrupting the Indian economy with their new ideas, new products and new experiences, every day. There is a long journey ahead of us and we are more energised than ever to build the financial ecosystem for disruptors.

Finally, I want to thank all our customers who have played an instrumental role in our journey from Day 1, by trusting us, relying on us and also providing the right criticism and feedback for us to improve at every step of the way. We wouldn’t be here without you all and we hope to continue to delight you as we continue on this journey, together.