Razorpay turns 10: From Koramangala flat to fintech unicorn to an India IPO soon

In the bustling neighbourhood of Koramangala, Bengaluru, two young IIT Roorkee alumni, Harshil Mathur and Shashank Kumar, shared more than just a flat—they shared a startup dream. When the duo founded Razorpay in 2014, the odds were stacked against them.

Payments, even in 2015, was considered a crowded space, with many believing there wasn’t room for another player.

Yet, 10 years later, Razorpay processes $180 billion in payments annually and is on track to hit a $1-trillion target, tapping the ever-growing India’s fintech landscape along the way.

The firm also announced that it is extending ESOPs worth 1 lakh to all its current employees. Today, the fintech major also powers payments for 80 of India’s 100 unicorns.

From its first ESOP buyback in 2018, which enabled 140 employees to liquidate their vested shares, the company did a $75-million ESOP buyback in 2022 benefiting 650 existing and former employees, according to its press release.

“Back then, most VCs said no. Payments, they believed, was already a saturated market,” Kumar recalled. It was Matrix Partners India, now Z47 that took a bet on Razorpay’s vision, led by Vikram Vaidyanathan, Managing Director at Matrix. “Shashank and Harshil’s singular focus on tackling payment failure rates with a technology-first approach set them apart,” said Vaidyanathan.

Matrix’s investment decision came after weeks of follow-ups and video calls—an unusual process in 2015. “We were in Y Combinator at the time and couldn’t fly back to India for a pitch,” Kumar said. “Matrix’s flexibility and persistence stood out. It wasn’t just about writing a check; they believed in us.”

“Harshil and I were shaped by our middle-class upbringing, where we learned to prioritize doing the right thing rather than taking shortcuts. Razorpay was never about short-term wins but about building something meaningful over the long term,” Kumar added.

Inflection points and growth milestones

Razorpay’s journey has been punctuated by several inflection points. “In the early days, our mobile-first payment stack and seamless checkout experience helped us onboard startups and SMEs,” Kumar explained.

Major milestones followed. The launch of UPI and the demonetization wave in 2016 accelerated digital payments. Then came the pandemic, which pushed traditional businesses to go digital. “From $50 billion to $180 billion in total payment volume—most of that growth has come in the past two years,” noted Arpit Chug, Chief Financial Officer at Razorpay.

"The journey from 50 billion to 180 billion has actually been just probably, I would say, the last 24 months. So the acceleration is only gaining momentum,” said the firm’s CFO Chug. "When I joined the company five years ago, we set a target for 100 billion. Everybody went like, oh, 100 billion, right? And now we’re at 180 already, he recalled.

Vaidyanathan credited Razorpay’s product-first philosophy for its success. “For the first five to seven years, every major decision—from hiring to organizational structure—was driven by their focus on technology and product,” he said.

Unlike many startups where investors take an active operational role, Razorpay’s relationship with its backers has been symbiotic. Vaidyanathan described Matrix’s role as an accelerator rather than a driver. “Our job was to provide the right introductions and act as a soundboard for their ideas,” he said.

Kumar elaborated, “Matrix’s network helped us hire senior leaders, which was challenging for us as young founders. Their association gave credibility to our vision, helping us attract top talent.”

Navigating Challenges

One of Razorpay’s biggest tests came when the Reserve Bank of India (RBI) increased regulatory scrutiny on payment aggregators and ordered the firm to onboard new clients. “We focused on what we could control,” Kumar said. This included rigorous compliance processes and diversifying revenue streams by scaling newer products like offline payment solutions.

“RBI is one of the most progressive regulators globally, but balancing innovation and compliance is always tricky,” Vaidyanathan noted. Despite challenges, Razorpay used the period to refine its offerings, growing its existing volumes by over 40 percent that year.

WATCH: How Razorpay Raced From Zero To $7.5 Billion, A Look At Its Journey From Jaipur To Bengaluru

The road ahead

With a one-trillion-dollar target in sight, Razorpay’s focus is expanding its platform’s depth and breadth. The company now serves businesses across channels, from online marketplaces to WhatsApp commerce. “Whether it’s cross-border payments or affordability solutions for high-value transactions, we aim to be the go-to platform for Indian businesses,” Kumar said.

Razorpay is also investing heavily in offline payments, with over half a million POS terminals deployed. “Omnichannel commerce is the future. We’re ensuring businesses can transition seamlessly between online and offline worlds,” Kumar added.

Exit strategy or long-term play?

In May, Razorpay moved its parent entity to India from the US, ahead of its plans to list in the Indian bourses.

When asked about a potential IPO or acquisition, Kumar remained noncommittal but optimistic. “We’re building for the long term. An IPO is a natural milestone, but our focus is on solving real problems for businesses. Everything else will follow.”

Vaidyanathan added, “Great companies focus on creating value. Razorpay is still in the early innings of its journey. The next decade will be even more transformative.”

As Razorpay enters its next phase, the partnership between founders and investors continues to be its backbone. “The privilege of being on this journey with them is ours,” Vaidyanathan concluded.