Converged payments solutions company Razorpay today announced its Series B funding round of $20 million, led by Tiger Global and Y Combinator along with participation from Matrix Partners. The current round raises the total funding the company has received to $31.5 million.
The company had previously raised $11.5 million in their Series A round from the same marquee investors along with 33 angel investors, and a strategic investment by MasterCard in 2016.
The new round of funding will be used to scale up the technological capabilities and product offerings. The funds will be used to expand the product portfolio into new verticals, expand the existing team and use cutting edge data science to build new customer experience, said the company in a note.
“The results that we have managed to achieve demonstrate the growth of India focused SAAS market and its increasing maturity. The idea we are promoting with Razorpay is that there will be one comprehensive and innovative product that will manage the entire money movement for India’s huge underserved business community.," said Harshil Mathur, CEO and co-founder Razorpay.
"With the online and digital payment space going through a massive transformation in India, their business is only going to grow further. There is now an inherent need for better systems, process and infrastructure in place and we are confident that Razorpay is perfectly suited to make the most of the changing landscape," said Anu Hariharan, partner at Y Combinator's $700 million Continuity Fund which has invested in Razorpay's Series B. Razorpay had become the second Indian company in 2015 to make it to Y Combinator's accelerator program.
Razorpay's business strategy underwent a major shift when the three year old company went from a payments gateway based business to offering converged payments solutions in September, last year.
Over the last year since demonetization, large number of payment facilitators have entered the Indian market including global names like PayPal and Stripe while technology giant Google made and entry via its UPI service Tez.
While the government is aggressively pushing digital payment options, analysts have noted that the B2B segment will grow much faster than the B2C segment over the next couple of years, mostly targetted at a large small and medium enterprise base of over 51 million businesses. Razorpay currently operates over 60,000 merchants across the country.