In October 2020, Razorpay had first entered India’s unicorn club. Just 14 months later, it’s become India’s fourth most valuable startup.
Razorpay has become India’s fourth most valuable startup after raising $375 million in its Series F funding round. The round, which was co-led by Lone Pine Capital, Alkeon Capital and TCV, values Razorpay at $7.5 billion. This makes Razorpay India’s most valuable fintech startup, and its fourth most valuable startup overall.
“We have become the de-facto choice for business (payments solutions),” said Razorpay CEO Harshil Mathur. “We went from five million to eight million merchants as many internet businesses are scaling very fast and they are getting funded to grow further. Neobanking banking is really scaling for us and all our offerings are now starting to come together (at a scale). We now have 25,000 users who use our banking suite service. This is a new industry we have created working with internet-first brands and early stage startups,” he added.
Razorpay has had a stunning last few quarters. In October 2020, it had first touched a valuation of $1 billion, but just six months later, in April 2020, it had tripled its valuation to $3 billion. Eight months after that, Razorpay has again more than doubled its valuation, and is now valued at $7.5 billion. Razorpay’s 7.5x increase in valuation in 14 months makes it India’s fourth highest-valued startup behind Byju’s, which is valued at $21 billion, Oyo Rooms, which is valued at $9.6 billion, and Dream11, which recently earned itself a valuation of $8 billion.
Razorpay had been founded in 2015, and its two founders had 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. Razorpay grew fast, and by 2020, counted Oyo, Airtel, Facebook, Flipkart, Zomato, Swiggy, Byju’s, Yatra and GoIbibo as clients. It processed payments of $25 billion per year, and had 10 million customers.
Razorpay now powers the banking requirements of more than 10,000 businesses, and during the Covid pandemic, has seen a multi-fold increase in transaction volume. Razorpay has also begun offering loans to businesses, and is already disbursing credit worth Rs. 700 crore per month to help entrepreneurs get access to working capital.
But there might soon be warning bells ringing about the rapid increase in the valuation of Indian startups this year. Just as Razorpay has managed to raise its valuation 7.5x in 14 months, Cred’s valuation has risen 5x in less than a year, Groww’s valuation has grown 12x in a year, and MyGlamm has managed to grow its valuation 12x in just 8 months. The public markets, meanwhile, are correcting the valuations of tech stocks — Paytm currently trades 40% below its IPO price, and Nykaa, Policybazaar and Cartrade are all trading 30% below their peaks. Private markets still seem to be making merry, but there are now indications that the 2021 valuation party of India’s tech ecosystem might be drawing to a close.