The pandemic has been harsh on the economy, the businesses have suffered and many people have lost their job. But there are few startups who had their luck during this time, as they got funded and had a road clear to move ahead.
One of the startups which became a unicorn in the time of the pandemic is Razorpay. It got funding of USD 100 million (Rs 731 crore) as announced on October 12, 2021. This financing round which is called Seris D was led by GIC, a Singaporean wealth fund, and Sequoia India. Other participants of the round were existing investors like Ribbit Capital, Tiger Global, Y Combinator, and Matrix Partners After this round of funding, the value of the company has been little more than USD 1 billion. After this round, the startup has entered the prestigious unicorn club of Indian startups.
The startup plans to use the funds collected to grow itself in the neo-banking offerings to have features like vendor payment, tax management, and expenses.
About the startup
Started in 2014, by IIT Roorkee graduates Harshil Mathur and Shashank Kumar, Razorpay is a fintech startup that is engaged in accepting, processing, and distributing money for small businesses on online mode. The idea of the startup came when the founders realized the difficulty faced by the small businesses and enterprises to accept money online. It is when these two people began looking for options around a payment processing business.
The startup was founded at a time when there were a handful of fintech firms that looked after the payment processes of small businesses. After the idea came, the further process was slow and took a lot of time, as the challenge and the business problem needed to be explained to the investors uncountable times.
But over time, the startup has become the largest payment provider for Indian businesses. The startup recently has even broadened its base of offerings by introducing the loan facility for the businesses and also started a neo banking platform to generate corporate credit cards and other products.
The startup which is headquartered in Bangalore has competition with PayU, a product of Prosus Ventures, which works by accepting payments from many options like UPI, credit cards, debit cards, and mobile wallets. The clients of Razorpay include Oyo, which provides lodging facility at a budget, Cred, another fintech firm that helps the users in paying their credit card bills, Facebook, a social networking site, an online shopping platform Flipkart, food delivery platforms Swiggy and Zomato, Yatra and Goibibo, which help in online booking of travel tickets, Byjus, online learning, and education platform, Zilingo which is a supply chain platform and Airtel, a big name in the telecommunication business.
The startup is one of the very few financial- technology firms that have shown growth in the past few years and aims to process about USD 25 billion in transactions for around 10 million customers in the present year itself, which is approximately around five times than the last year. It has the goal to serve around 50 million businesses by 2025 and plans to acquire some firms as it is looking for options in the neo banking category. The founders have credited the ongoing COVID pandemic as one of the reasons for its growth as many businesses shifted their payments platform to online mode.
The founders have said that the startup has the vision to make a fruitful contribution to help the industry grow and help with the adoption in the markets and areas which are underserved and help in strategizing and driving new practices and new ideas in the industry.
Besides Razorpay many other startups have entered the Unicorn club-like Unacademy, and Pine Labs.