Razorpay's Harshil Mathur (CEO and Co-Founder) and Shashank Kumar (CTO and Co-Founder)
Digital payments and business banking platform Razorpay said it has raised $160 million in its Series E round of funding, at a valuation of $3 billion, barely six months after it raised funding that valued it at a billion dollars, underlining the huge funding interest in the current environment.
In an interview with Moneycontrol, Razorpay co-founder and CEO Harshil Mathur said the money will be used to take its digital payments offering to South East Asia, make acquisitions and build out its neo-banking platform, with plans to hire over 600 employees. The round was co-led by its existing investors GIC and Sequoia India, with Ribbit Capital, Matrix Partners and Tiger Global also participating.
"Digital payments have seen a very rapid rise in the last year since the pandemic and we have been a great beneficiary of that. The new initiatives that we launched on the lending side and the neo-banking side have seen a rapid scale-up over the last six months. Because of that, our existing investors Sequoia and GIC came back and wanted to do another round, given the increased growth in the company," Mathur said.
Its previous round closed in October 2020 when it raised $100 million in a round co-led by GIC and Sequoia. It had entered the unicorn club at that time. The new funding gives Razorpay a total of $366.5 million in investments since it was founded seven years ago.
When asked if this was to take advantage of the money and valuation available in the current market, Harshil said: "We are not a very high cash-burning company. But it's not just because the valuation is high. This helps us invest a lot more on the banking side, we are looking at inorganic opportunities and on the payments side we are looking at markets outside India this year, especially in South East Asia and that requires additional capital."
Razorpay is looking to buy B2B financial Saas startups in segments such as SME credit, accounting and taxation, accounts receivable and expense management. It has been disbursing credit upwards of Rs 700 crore per month, and now plans to scale this up to Rs 1,000 crore per month by end of this year.
The Bengaluru-based startup was founded in 2014 by IIT Roorkee graduates Harshil Mathur and Shashank Kumar. While it started out as a payment gateway focussed on startups and SMEs, it is also betting big on its neo-banking platform called RazorpayX and its SME lending arm Razorpay Capital.
Its payment gateway has over five million online merchants, including Facebook, Airtel, Ola, Zomato, Swiggy and Cred, with a total payment volume of $40 billion. It also offers services like automating vendor payments, real-time reconciliation, analytics, managing subscriptions, GST invoicing, designing and creating websites. The business banking and credit products are provided in partnership with banks.