Razorpay Secures $160 Million in Series E Funding, Tripling Valuation to $3 Billion

Indian fintech trailblazer, Razorpay, has raised a staggering $160 million in its latest funding round, marking a significant leap in its valuation from $1 billion to an impressive $3 billion in less than a year. The series E funding was led by established investors Sequoia Capital and Singapore’s GIC, with participation from Matrix Partners and Ribbit Capital. This financial injection positions Razorpay for robust expansion into Southeast Asian markets and strategic acquisitions in the cloud software domain.

The Bengaluru-based startup has experienced remarkable growth over the past year, particularly during the pandemic-induced surge in online payments, digital banking, and lending. Razorpay’s co-founder and CEO, Harshil Mathur, highlighted the company’s achievements, stating, “Razorpay has seen a lot of growth in the last one year, with the pandemic and growth in online payments, digital banking, and lending. We want to double down on it and invest further.” The tripling of its valuation underscores Razorpay’s pivotal role in India’s evolving fintech landscape.

Razorpay intends to utilize the fresh funds to expand its footprint into at least four Southeast Asian markets. The company aims to capitalize on the digital transformation trends in these regions, much like it did in India six years ago. The targeted countries for expansion include Indonesia, Malaysia, Philippines, and Vietnam. Mathur plans to enter two of these markets within the current financial year, emphasizing the goal to address similar challenges these markets face in terms of online payments and digital financial solutions.

In addition to geographical expansion, Razorpay is eyeing acquisitions in the B2B software space. The focus is on companies that can complement Razorpay’s existing offerings and enhance services for its merchants. Mathur envisions a strategic approach to acquisitions, seeking targets in areas such as tax payments, business reporting, financial accounting, and treasury management.

Razorpay has already ventured into acquisitions, notably Thirdwatch, an AI-based fraud detection software provider for ecommerce businesses, and Opfin, a payroll automation software company. The acquisitions have contributed to Razorpay’s diversified product portfolio, with the payroll business experiencing a remarkable ten-fold growth. Razorpay’s lending arm, Razorpay Capital, is witnessing rapid growth, with monthly loan disbursals exceeding Rs700 crore. The neobank, RazorpayX, has become instrumental in digitizing banking transactions for over 15,000 merchants, experiencing a 400 percent surge in transaction volumes over the last 12 months.

Razorpay’s clientele includes industry giants such as Facebook, Airtel, BookMyShow, Ola, Zomato, Swiggy, Cred, and ICICI Prudential. With the new funding, the company aims to achieve $50 billion in annual total payments volume, building upon its current impressive figure of $40 billion. Razorpay’s ambitious goal aligns with its mission to become the go-to platform for businesses, offering comprehensive solutions to manage and move money seamlessly.

The funding round brings Razorpay’s total funding to an impressive $366.5 million, signaling a strong vote of confidence from investors. Harshil Mathur expresses the company’s vision succinctly, stating, “Our goal is to become the single platform that a business needs to manage and move money. It’s still early days.” Razorpay’s trajectory reflects the dynamism and potential within India’s fintech sector, with the company poised to play a pivotal role in shaping the future of digital finance in Southeast Asia and beyond.