Fintech unicorn Razorpay's value jumps to $7.5 bn; up 7.5x in 15 months

Fintech unicorn Razorpay has raised $375 million in the Series F round of funding at a $7.5-billion valuation, making it India’s second-most valuable start-up in this space, after Paytm. The company valuation has surged over seven times in 15 months, helping it push Walmart-owned digital payments firm PhonePe to the third spot on the country’s most-valuable fintech list.

Razorpay’s latest round of fundraising was led by Lone Pine Capital, Alkeon Capital, and TCV. It also received participation from existing investors like Tiger Global, Sequoia Capital India, GIC, and Y Combinator. The money would be invested in Razorpay’s goal to become a full-stack financial solutions company, providing for all payments and banking needs of businesses on one platform.

It also plans to use the fresh fund to scale up its business banking suite RazorpayX and offer new banking solutions in 2022. The firm plans to invest in new acquisitions in 2022 and expand its presence across the globe, starting with the Southeast Asian countries. Razorpay is also looking to hire over 600 employees to fuel these growth plans.

Razorpay was valued at $1 billion in October 2020 and $3 billion in April 2021. With the Series-F round, Razorpay has raised a total of $741.5 million in investments since its inception in 2014.

Paytm, which went public in November, was valued at $16 billion when it raised $1 billion in a funding round in 2019. PhonePe was valued at $5.5 billion in December 2020, when it raised $700 million in primary capital from the existing Flipkart investors, including Tiger Global.

“We’ve come a long way in these seven years, and more so since 2020,” said Harshil Mathur, CEO and co-founder of Razorpay. “Moving forward, we believe we will radically change how payments and banking are done in nearly every sector of India.”

The firm powers payments for over 8 million businesses, including Meta (formerly Facebook), Ola, Zomato, Swiggy, Cred, Muthoot Finance, National Pension System and Indian Oil, and is expected to reach 10 million businesses by 2022-end. Of the 42 companies that were crowned as unicorns in 2021 alone, Razorpay provides payment solutions for 34 of them.

Shashank Kumar, CTO and co-founder, Razorpay, said: “We want to create new products and build experiences that will change the lives of millions of businesses and consumers.”

Razorpay recently launched several products at its flagship event FTX’21 and they included Magic Checkout, RazorpayX Tax Payment Suite, and Razorpay Rize. The company achieved a $60-billion TPV (total payment volume) in early December 2021. It aims to achieve $90 billion TPV by the end of 2022.

“We are delighted to back Harshil (Mathur), Shashank (Kumar), and the entire Razorpay team,” said John Doran, general partner at TCV. “We think they are building the next-generation payments and banking platform in India.”

The company clocked over 300 per cent year-on-year growth for the second year in a row.

David Craver, co-chief investment officer at Lone Pine Capital, said Razorpay has been at the forefront of creating resilient, innovative products to anticipate and address the changing needs of businesses.

Deepak Ravichandran, general partner at Alkeon Capital, said as the leading online payments player in the rapidly accelerating Indian digital payments market, Razorpay has continued to innovate and blaze new trails.

UP & UP

• $375 mn raised in Series F round by Razorpay. The round was led by Lone Pine Capital, Alkeon Capital and TCV
• $741.5 mn the company has raised since its inception in 2014
• $1 bn it was valued in October 2020 and $3 billion in April 2021
• $16 bn Paytm was valued when it raised $1 billion in 2019
• $5.5 bn PhonePe was valued in December 2020 when it raised a $700 million funding round. It is India’s third most-valuable fintech start-up