Bengaluru-based fintech startup Razorpay has become the latest entrant into the much-coveted unicorn club after raising USD 100 million in Series D round valuing it a little north of USD 1 billion. The funding round was co-led by GIC, Singapore’s sovereign wealth fund, and Sequoia India, along with participation from Ribbit Capital, Tiger Global, Y Combinator, and Matrix Partners.
The company plans to use the funding to invest in new initiatives to empower small and medium enterprises and increase its team size by 500 by FY 21. It will also use the funds to further strengthen and accelerate its neo banking platform RazorpayX and the lending business Razorpay Capital, which it expects to contribute to 35% of its revenue by FY 2021.
As such, RazorpayX has witnessed 100% growth in the last six months, the company claims. Now it is targeting 200% growth by FY 21, it said.
Razorpay said its business grew by 300% in the last six months due to the spike in the demand for digital payments during the pandemic when users preferred online payment methods instead of transacting in cash.
“India’s digital ecosystem is seeing unprecedented growth with online shoppers expected to cross 350 million by 2025. This trend of digitization is penetrating India across social strata and geography and Razorpay is playing a pivotal,” Ishaan Mittal, principal, Sequoia Capital India LLP, said in the statement.
Founded in 2014, Razorpay offers enterprises payment and banking solutions to facilitate payments and manage their flow of money. The startup has raised a total of USD 206.5 million in investments since its inception. Last year, the company raised USD 75 million Series C from Sequoia Capital, Ribbit Capital, along with Tiger Global and Y Combinator.
Razorpay aims to power payments and banking for 50 million businesses by 2025 from the current five million. Its customers include Airtel, BookMyShow, Facebook, Ola, Zomato, Swiggy, Cred, and ICICI Prudential, among others. By the end of this year, it expects to double its user base to 10 million.
“We will continue to make an impactful contribution to the growth of the industry, aid adoption in the under-served markets, and drive new practices and new thinking for the industry to follow,” Harshil Mathur, CEO and co-founder, Razorpay, said in a statement. “This investment fits perfectly with our growth strategy.
The fintech market in India was valued at INR 1,920.16 billion in 2019 and is expected to reach INR 6,207.41 billion by 2025, expanding at a compound annual growth rate (CAGR) of 22.7% during the 2020-2025 period, according to a recent report by ResearchAndMarkets.
Razorpay has become the sixth startup to enter the unicorn club after Postman, Pine Labs, Unacademy, Nykaa, and Zerodha.