Razorpay will use the latest funds to expand into Southeast Asian markets, scale up its business banking suite, and invest in acquisitions.
Indian fintech startup Razorpay has raised US$160 million in its Series E round of funding, the company said in a statement today. The round, co-led by Sequoia Capital and Singapore’s sovereign wealth fund GIC, has tripled the company’s valuation to $3 billion in under six months, the statement added.
Existing investors Ribbit Capital and Matrix Partners also participated in the latest funding round. With the fresh round of funding, Razorpay’s total investments to date have reached $366.5 million, the company said.
In October last year, the Bengaluru-based company had raised $100 million in Series D funding to enter the coveted unicorn club in India. Razorpay claims to be India’s first operational neobank to have attained unicorn status.
Founded in 2014 by Harshil Mathur and Shashank Kumar, Razorpay provides enterprise clients with multi-channel digital payments and banking solutions. Its neobanking platform, RazorpayX, saw a growth of 400% in transaction volume in the last 12 months. Razorpay’s solutions enable over 15,000 Indian businesses to manage their money, the company said.
The fintech startup also saw month-on-month growth of 40-45% in the last six months. It stated that it has achieved a total payment volume (TPV) of $40 billion, and has over five million businesses as customers. This includes companies such as Facebook, Airtel, CRED, Zomato, and Swiggy, among others.
Funds to be utilized for acquisitions and market expansion
Razorpay will use the latest funds to expand into Southeast Asian markets, and offer its payment gateway services in the region. The funds will also be used to scale its business banking suite. The company will also invest in acquiring B2B financial software-as-a-service (SaaS) startups to help expand its product line for SMEs. In order to fuel its growth plans, the company is hiring over 600 employees, it added.
The company also stated that a part of the funding will be utilized to roll out new products under the RazorpayX brand. These products will be tailored to improve security, convenience, and expense management features, and to minimize financial risk.
“Being a technology-first company, we’re always evaluating products and technologies that automate long and arduous money movement, accounting and other banking processes, thereby allowing businesses to focus more on their growth,” Razorpay Co-founder and CTO Shashank Kumar said in the statement.
“In the next 12 months, Razorpay will look to introduce more such products, through strategic partnerships and acquisitions which fit into our vision of making financial infrastructure easy and available to businesses across the country,” he added.
Razorpay marked its first acquisition in August 2019 by acquiring Thirdwatch. Thirdwatch is an AI-driven company specializing in big data and machine learning for real-time fraud prevention. In November 2019, the company acquired cloud-based payroll management startup Opfin, to help enterprise clients automate their payroll processes.
“We at Razorpay want to be the one-stop financial platform that a business needs to simplify and manage their end-to-end money movement,” said Razorpay Co-founder and CEO Harshil Mathur.
“We have made some strides towards that journey, our recent initiatives in the Banking and Lending space through RazorpayX & Capital have helped businesses solve for some very unique challenges around managing money, empowering businesses to grow up to 10X in spite of an economically difficult year,” he added.
However, Mathur noted that more can be done to develop new banking technologies that can meet growing demand. “And so we plan to use these funds to further expand our banking and lending product suite so that we not only provide a better experience to businesses and their customers but significantly contribute to the growth of our partner businesses.”
The latest funding announcement from Razorpay tops up an exciting couple of weeks in the Indian startup ecosystem. It added six new unicorns in the first week of April, marking a significant moment for the Indian startup sector. So far, Indian startups have raised $3.76 billion in funding dollars from 257 deals in the first quarter of 2021.
Header image courtesy of Razorpay