Razorpay Plans To Raise $200 Mn From GIC, Others At $2 Bn Valuation

SUMMARY

Razorpay became the fifth fintech startup to enter the unicorn club, after raising $100 Mn in October 2020

The company is now seeking double the valuation due to an uptick in digital transactions in recent months

It reported a revenue of INR 519.42 Cr with a net loss of INR 6.15 Cr in FY20

Bengaluru-based payments gateway Razorpay, which entered the unicorn club last October, is now looking to raise another $150 Mn-$200 Mn funding at a valuation of $2 Bn. The company is currently in talks with existing investors, including sovereign investment fund Singapore Investment Corporation (GIC), Tiger Global and Sequoia Capital.

Razorpay was valued at $1 Bn in October 2020, after it raised $100 Mn in a Series D funding round led by GIC and Sequoia India. Ribbit Capital, Tiger Global, Y Combinator and Matrix Partners also participated in this round.

Razorpay is now seeking double the valuation due to an uptick in digital transactions in recent months as the Covid-19 crisis has pushed small businesses as well as enterprises to adopt online payments as an option, an ET report added citing industry experts.

Meanwhile, a person aware of the development told the publication, “the investor sentiment is favourable for fintech firms as they can command strong valuations due to a massive push towards digital payments and financial services in India.”

As per Inc42+ estimates, about $11.5 Bn was invested in Indian startups in 2020. Of this, nearly 18.2% of the capital went into fintech firms that raised about $2.1 Bn across 131 deals. Fintech also emerged as the top-funded sector in 2020, followed closely by enterprise tech with $1.7 Bn across 128 deals and consumer services with $1.68 Bn across 95 deals.

It is important to note that Razorpay was the fifth fintech firm to achieve ‘unicorn’ status after online payment gateway BillDesk, Flipkart-owned PhonePe and insurtech startup PolicyBazaar, which were all valued at over $1 Bn in 2018.

Razorpay was founded by Shashank Kumar and Harshil Mathur in 2014. It currently powers digital payments for over 200K small and large businesses, including Airtel, BookMyShow, IRCTC, Aditya Birla Capital, NSE, among others. The company also plans to launch products for its neo-banking business Razorpay X and lending business Razorpay Capital, seeking to double its growth in 2021.

In the financial year 2020, the company had reported a revenue of INR 519.42 Cr with expenses worth INR 525.41 Cr, leading to a net loss of INR 6.15 Cr. The fintech startup had spent INR 202.15 Cr to earn INR 197.5 Cr in FY2019, leading to a net loss of INR 3.26 Cr.