Razorpay marks 10 years, targets about $400 billion in TPV by 2030

The company's next target is focused on transforming the payment experience for more than 1 billion consumers

In 2014, fresh graduates Harshil Mathur and Shashank Kumar from the Indian Institute of Technology, Roorkee, walked into a bank branch in Jaipur dressed in T-shirts and casual trousers, expressing their desire to start a payment gateway. The staff, however, was confused and did not realise they were seeking advice on launching their own payment gateway. Despite their efforts to identify the right contacts, create a business proposal, and send it out, the duo faced constant rejection. Each time, they were told they lacked the necessary background in financial services, with at least 100 bankers turning them down.

 

“We were 23 or 24, fresh out of college, and it was evident to people that we lacked a financial services background, especially since we were always in T-shirts and casual clothes,” recalled Harshil Mathur, co-founder and chief executive officer (CEO) of fintech company Razorpay, in a video interview. He co-founded payment gateway Razorpay along with Kumar in 2014.

 

A year later, Razorpay was selected for a programme at Silicon Valley-based startup accelerator Y Combinator (YC), then led by Sam Altman, now CEO of OpenAI. During the programme, Mathur shared with Altman how bankers had dismissed him and Kumar, assuming they were too young and lacked the experience to build a fintech company. Following Altman’s advice, Mathur and Kumar began wearing suits and ties and grew beards to appear older.

 

“Sam, in his typical fashion, said, ‘If looking young is the problem, why don’t you look older?’ He told us that if perception was an issue, we needed to do whatever it took to change it,” said Mathur. “That advice made a difference. In this industry, appearances do matter. That was the first time I had a suit made. I started dressing more formally for meetings, and while I’m not sure if it directly made a difference, it definitely changed how people responded to us. We came across as more experienced and looked like we belonged in the ecosystem, rather than complete outsiders.”

 

A lot has changed over the past decade. Razorpay, which recently marked its 10th anniversary, has cemented its position as a leader in digital payment processing, with an annualised total payment volume (TPV) of $180 billion. The Bengaluru-based company is now valued at $7.5 billion, making it the highest-valued B2B (business-to-business) fintech firm in India. Razorpay has expanded its partnerships to include major banks like Axis, Yes, ICICI, and RBL, and powers online payments for 86 out of India’s top 100 unicorns.

 

Over the past 10 years, the company has served more than 5 million businesses and reached over 200 million end consumers in the country. These range from a kirana shop in Kashmir collecting payments on its point-of-sale (PoS) device to a textile exporter in Kanyakumari accepting dollars through its international payments product.

 

Razorpay is now targeting a TPV of about $400 billion by 2030. The company is focused on transforming the payment experience for more than 1 billion consumers.

 

India’s economy stood at $3.57 trillion in FY24, and with an annual growth rate of approximately 6.5 to 7 per cent, the $5 trillion target is expected to be reached by 2028-29. Mathur is expecting a digital payment ecosystem worth $1.5 trillion to $2 trillion by that time.

 

“We aim to capture at least 25 to 30 per cent of that market,” said Mathur. “From a business perspective, we aim to become a $1 billion revenue company before 2030.”

 

Razorpay reported a 9 per cent rise in its total income to Rs 2,501 crore during FY24 from Rs 2,293 crore in FY23. The payment gateway business contributed Rs 2,068 crore.

 

“I think Harshil (Mathur) is being conservative with his estimates. If you ask me, by 2030, Razorpay will surpass the numbers that he mentioned,” said Ishaan Mittal, managing director, Peak XV Partners, an investor in Razorpay, in an interview.

 

Great teams, innovation

 

Razorpay has raised total funding of about $742 million from marquee investors such as TCV, GIC, Tiger Global, and Peak XV. Overall, it competes with players such as Pine Labs, PayU, Juspay, and BillDesk.

 

Peak XV’s early confidence in the vision and steadfast support were crucial in shaping Razorpay into the company it has become today.

 

“The Indian digital ecosystem has grown at an incredible pace, and Razorpay has scaled far beyond what we initially expected,” said Mittal of Peak XV Partners. “Even when we invested, we did not anticipate that the company would become such a dominant fintech player so quickly. Razorpay and its team have far surpassed even our projections and models.”

 

Mittal is of the view that great teams, especially those that are exceptional at product and innovation, tend to capture a disproportionate share of the market as it grows.

 

“Every time the market expanded, Razorpay managed to take the lion’s share of the new opportunities,” said Mittal.

 

Typically, in a market, one would expect the largest player to grow more slowly, while smaller companies scale quickly due to their lower base. But in the case of Razorpay, Mittal is seeing the opposite—the company is gaining market share while also growing the fastest.

 

“That is extremely rare. It usually only happens with companies that have a strong product and engineering foundation,” said Mittal. “If I remember correctly, Razorpay launched neobanking even before Stripe did in the US. That kind of foresight and innovation is the company’s real differentiator.”

 

Global expansion, IPO

 

Razorpay is also scaling up its efforts for international expansion. India’s complex payments market and a tough regulatory ecosystem have emboldened Razorpay and are helping the fintech firm’s planned expansions into Southeast Asia and West Asia. Razorpay made its foray into Malaysia in 2022 and is already seeing huge traction there.

 

“We are preparing to launch in Singapore. Over the next couple of years, we aim to enter more markets across Southeast Asia,” said Mathur. “Many countries in this region are trying to replicate India’s digital payments success, and this creates a big opportunity for Razorpay to expand internationally and contribute to their fintech growth.”

 

Currently, the company’s payment business is profitable. It is intensifying its efforts to achieve profitability in all its businesses as it is planning an initial public offering (IPO) in two years. As part of those efforts, it has also initiated the process to move its parent entity to India from the United States.

 

“We anticipate that it will take at least two more years for us to be in the ideal position to go public,” said Mathur. “That timeline allows us to prepare the company the right way—from governance and compliance to financial maturity—so that when we do take that step, we are ready to operate as a truly public institution.”

 

The firm recently entered offline payments as well. The combination of offline and online payments—omnichannel payments—is going to be a major growth driver for the company over the next few years. Razorpay is also improving its neobanking solutions. This includes making them more efficient for businesses to manage their financial operations, including payments to vendors, suppliers, and sellers.

 

The firm has invested significant effort into integrating AI tools across every single team. This is helping it increase productivity across different teams such as customer service, engineering, and internal operations. It is building entirely new tools and services using AI. For example, AI-based fraud protection—a system that can detect and prevent fraud in real time—is something that was previously not possible at scale without AI.

 

“AI will power almost every major innovation we introduce in the next few years,” said Mathur.

 

Tailwinds

 

Beyond execution, Mathur also attributes the success of Razorpay to external tailwinds like demonetisation, Unified Payments Interface (UPI), and the Covid-19 pandemic, which helped it scale up even faster. The biggest one was demonetisation in 2016. Every business needed to accept digital payments overnight.

 

“We were the fastest platform to get them live. That led to an explosion in growth,” he said.

 

Then came the UPI, which was also launched in 2016 for public use. Initially, UPI was seen as a peer-to-peer (P2P) instrument. Many were not sure if it would work for merchants. Large payment players were hesitant to integrate it.

 

“But we saw how seamless UPI was, and we believed in its potential. We took a bet and became the first payment gateway to enable UPI for merchant transactions,” said Mathur. “That was a game-changer for us.”

 

Also, during the Covid-19 pandemic in 2020, businesses needed to digitise payments faster than ever before. Again, Razorpay was the fastest to onboard merchants.

 

“We set up war rooms, launched new features rapidly, and offered incentives to help businesses adapt to digital payments. As a result, a massive number of businesses came on board with us,” said Mathur.