Is Razorpay the next Fintech Decacorn from India?

Last day, Razorpay raised $375M in its series F round, making it one of the largest funding rounds in the Indian fintech industry, valuing it at $7.5 billion, 2x valuation from its last round.

Razorpay started as an easy to use payment gateway for the Indian market, founded by two Indian Institute of Technology, Roorkee alumni, eventually became part of YCombinator's 2015 winter batch.

What problem does razor pay solve?

When Razor pay started in 2015, startups and SMBs faced these issues.

👋  Existing payment gateways required lengthy processes and complicated documents to get started with, like past operational records, presence of physical offices, safety deposits etc.

👋  Very high setup fees.

👋  Poor thierdparty intagrations.

👋  High payment failure rates and downtimes were typical.

👋  Terrible customer support

Moreover, existing payment gateways of that time used API's from the banks and built an additional layer on top of it. Their entire product served as an addition to exiting bank APIs, which led to several bottlenecks and limitations in functionality.

How did they solve it?

Razor's founding team went to the potential customer base, studied customer demands, and built a product that small merchants and SMBs can use startups without complicated starting processes and setup fees.

From early days Reazor pays team emphasized and provided resources to processes that facilitated growth. Razorpay iterated its product offering and expanded its product line based on customer demands.

Revenue model 💰

Razorpay generates revenue by collecting 0.25 - 0.5 % fees for each subscription transaction via its platform, along with its new offerings, which provide working capital leverage to these businesses.

Their current story?

Currently, their platform powers more than 170,000 SMB while maintaining an impressive 40-45% month-on-monthly growth rate.

Being laser-focused on technology and product, Razorpay was able to Scale its operation to $60 billion in transactions annually.🔥.

Razorpay has the Desi Stripe soul at heart which is quickly optimizing all its offerings and vertical to groom itself for a future IPO ( 2-2.5 year timeline)

Their latest round was co-lead by Lone Pine Capital LLC, Alkeon Capital Management and TCV while seeing participation from existing investors, including Tiger Global Management, Sequoia Capital, GIC, and Y Combinator.

Kudos for achieving this tremendous growth. Best wishes and lead the way Shashank Kumar and Harshil Mathur.

Note: If you have any suggestions reach out to me at a4santho@uwaterloo.ca