Many of India’s businesses are struggling to get back to their feet after the coronavirus lockdowns, but others haven’t missed a beat.
Online payments provider Razorpay has become India’s latest unicorn after a $100 million fundraise. GIC, Singapore’s sovereign wealth fund, along with Sequoia and existing investors Ribbit Capital, Tiger Global, Y-Combinator and Matrix Partners participated in the fundraise. Razorpay was founded in December 2014 to accept, process and disburse online payments.
“Five years ago, when Harshil & I moved to Bangalore to start Razorpay, the startup ecosystem was still nascent and less than a decade old.” wrote Razorpay co-founder Shashank Kumar in a blogpost. Shashank Kumar and Harshil Mathur had met at IIT Roorkee, and had realized that it was very hard for small businesses to process digital payments. In their early days, the founders worked with a team of 11 out of a single apartment, and struggled to get banks to work with the young company. The company had eventually raised funding, become the 2nd ever Indian company to be a part of the prestigious Y Combinator program, and moved into some smart digs.
Things have changed considerably since then. The demonetization exercise of 2016 gave a massive fillip to online payment firms in India, and Razorpay was perfectly poised to take advantage. Razorpay now counts Oyo, Airtel, Facebook, Flipkart, Zomato, Swiggy, Byju’s, Yatra and GoIbibo as clients, and processes payments of $25 billion per year. Its payment volumes have grown 5x over the last year, and it has 10 million customers.
Razorpay is also experimenting with new products. It has launched something called Payment Button, that claims to enable small businesses to start receiving payments on their website in less than 5 minutes. Razorpay has also launched its neobank product called Razorpay X, which provides small businesses with a singular hub for all financial operations. Razorpay says that Razorpay X has served 10,000 businesses within 12 months of its launch.
And Razorpay seems optimistic about the future. “Despite the tremendous growth we’re witnessing in the digital payments ecosystem, online payments still barely account for a meagre 3% of Indian economy,” wrote Shashank Kumar. “I strongly believe that in India’s journey towards achieving the $5 trillion GDP target by 2024, digitization of the economy and Indian businesses is not just a nice-to-have but rather a strong force multiplier. So yes, there’s a long way to go,” he added.