Venture Capital: Razorpay Is India’s Latest Unicorn
Singapore’s GIC and Sequoia co-led a $100 million round into the fintech and neobank.
Razorpay, which enables businesses in India to accept, process, and disburse payments with its product suite, has achieved the hallowed unicorn status. The fintech raised $100 million in a Series D funding round led by Singapore sovereign wealth fund GIC and Sequoia with participation from previous investors Ribbit Capital, Tiger Global, Y-Combinator, and Matrix Partners. (CIO)
In a blog post, Razorpay co-founder Shashank Kumar also confirmed the funding round had catapulted to unicorn ranking – the latest in India.
“With this fundraiser, we will focus on going deeper into the Indian market and broaden our product portfolio to grow our business and achieve profitability,” said Harshil Mathur, chief executive and co-founder.
“With COVID causing a potential paradigm shift in the way commerce happens in the country, we are seeing multiple new demographics of businesses looking to move online and start leveraging the internet and mobile technology,” wrote Kumar.
Razorpay derives 80% of its revenues from its online payment gateway, which serves five million customers.
Apart from the boost from the pandemic, the founders see a lot of promise for digitization in India.
- Online payments still barely account for a meager 3% of the Indian economy
- Small business owners spend around 60% of their time managing their finances
- However, today, businesses (of all sizes) want a singular hub for all financial operations
- There are 42.5 million SMEs in India but more than half do not use digital financial tools
- There is a huge demand, in billions of dollars, for credit
- Neobanking’s time has come
- Neobanking has the potential to provide a low-cost banking solution through a structured financial channel
Use of funds
Razorpay will use the new money to launch products for its neo-banking business Razorpay X and lending business Razorpay Capital.
These business lines are expected to generate nearly 35% of its revenues by next year. The fintech also intends to double the growth in these products.
As of date, Razorpay has raised $206.5 million.
During the current year, according to TechCrunch, Razorpay expects to process about $25 billion in transactions — up five times from last year — for nearly 10 million of its customers this year.
Related Story: Indian FinTech Paytm Takes On Google, Alleges “Arm-Twisting”
Latest Alternative Investment News
29-year old billionaire founder and CEO Sam Bankman-Fried is a majority owner of FTX. Just three months after closing a record $900 million Series B round, FTX, the Bahamas-headquartered crypto…
Russia’s crypto mining industry is in expansion mode after China’s clampdown on its crypto miners. Also wanting to join the party are Russian oil and gas companies that flare, or…
Rossum offers an end-to-end AI document processing solution that combines its cognitive data capture platform with a full suite of integration capabilities to automate document-based communications between diverse businesses. The…
Alternative Investments/ESG: New York Life Floats ETFs For Gender Equality, Clean Oceans, Cleaner Transport
The three thematic ETFs meet investor demand for ESG approaches. IndexIQ, the New York Life Investments company, announced Wednesday the launch of three new ETFs. The IQ Engender Equality ETF…