SUMMARY
Razorpay is the latest entrant in the unicorn club, having raised $100 Mn in a round led by Singapore’s sovereign wealth fund GIC
The funding puts Razorpay’s valuation a little over $1 Bn
Razorpay’s existing investors Ribbit Capital, Tiger Global, Y Combinator and Matrix Partners also participated in the round
Bengaluru-based payments gateway Razorpay is the latest entrant in India’s unicorn club (startups with a valuation of more than $1 Bn). With the latest round of funding worth $100 Mn led by Singapore’s sovereign wealth fund GIC and existing investor Sequoia India, Razorpay’s valuation now stands a little more than $1 Bn up from $106.7 Mn in 2019 when it had last raised funds worth $75 Mn in a Series C round.
The recent Series D funding round also saw participation from existing investors Ribbit Capital, Tiger Global, Y Combinator and Matrix Partners. It has raised $206.5 Mn since its inception in 2014.
“GIC is a good long-term investor to have. Their knowledge about public markets and investment in firms like Bajaj Finserv Ltd and Bandhan Bank Ltd will help us in our journey to go public. With this fundraise, we will focus on going deeper into the Indian market and broaden our product portfolio to grow our business and achieve profitability,” said Harshil Mathur, chief executive and cofounder of Razorpay.
Razorpay is the fifth Indian 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 billion in 2018.
Paytm entered the unicorn club back in 2014 and is the most valuable startup in the country at $16 Bn.
“Razorpay has established itself as a clear leader, with its strong focus on customer experience and product innovation,” said Choo Yong Cheen, Chief Investment Officer for Private Equity at GIC, in a statement. “GIC has a long track record of partnering with leading fintech companies globally and is delighted to partner with Razorpay in its journey to transform payments and banking,” Cheen added.
Founded by Shashank Kumar and Harshil Mathur in 2014, as a payment gateway service, Razorpay currently powers digital payments for over 200K small and large businesses, including Airtel, BookMyShow, IRCTC, Aditya Birla Capital, NSE, among others.
Razorpay, plans to use the funds to launch products for its neo-banking business Razorpay X and lending business Razorpay Capital, seeking to double their growth in the coming year. It also plans to hire 500 people across functions of growth, product and technology.
“It is too early to speak on which startups we are looking to acquire since these are still in the discussion phase. But we continue to look at inorganic avenues of growth through opportunistic acquisitions,” said Mathur.
The six-year-old startup provides payments and other financial infrastructure to help businesses manage money flow. Its core business continues to be its online payment gateway, which accounts for 80% of its revenue, as it serves five million customers, including Airtel, BookMyShow, Facebook India and Sony.
The company had raised $18.37 Mn from its US parent Razorpay Inc in 2019. Last year it had also raised $106.7 Mn from Sequoia, Tiger Global, Y Combinator among other marquee investors. In August 2019, Razorpay acquired a Delhi NCR-based artificial intelligence (AI) company Thirdwatch for an undisclosed amount.
India has more than 35 startup unicorns, with several existing ones raising funds this year. Edtech startup Unacademy, developer collaboration platform Postman and cosmetics and fashion marketplace Nykaa turned unicorns this year.
