Ali Hasan
You must use Razorpay to handle all Online Transactions of your Business
Introduction – Razorpay is a platform that enables businesses to accept, process, and disburse payments with its product suite. It gives access to all payment modes including credit card, debit card, net banking, UPI and popular wallets including JioMoney, Mobikwik, Airtel Money, FreeCharge, Ola Money, and PayZapp.
The company was founded in 2014 and is headquartered in Bangalore, Karnataka, India. Razorpay’s business banking arm, RazorpayX, brings effectiveness, efficiency and excellence to all financial processes.
With RazorpayX, businesses can get access to fully-functional current accounts, supercharge their payouts and automate payroll compliance. Manage your marketplace, automate bank transfers, collect recurring payments, share invoices with customers and avail working capital loans – all from a single platform. Fast forward your business with Razorpay.
Early Days – The idea to create a company like Razorpay came into picture when the founders wanted to make the payment process simple for startups and SMEs. Hence, Harshil Mathur and Shashank Kumar started Razorpay in 2014.
With no background in finance, the duo decided to build a payment gateway after they realized the existing online payment systems were long and tedious. The idea was simple – get payment gateway integration for startups and merchants within 15 minutes. The existing systems needed a lot of paperwork and took close to a month to integrate.
Fast forward to today, Razorpay has a wide spectrum of paying customers. It caters to more than 350,000 merchants, including the likes of startup unicorns such as OYO, Zomato, and Swiggy, and large enterprises like Airtel and the state-run IRCTC.
It processes transactions to the tune of $5 billion annually, on-boarding over 5,000 business using its platform for payments every day.
Marketing Strategy – They market themselves as a business which makes it easier for you to focus on your business as they work on simplifying your payments.
User Base & Valuation – According to Razorpay, more than 5 million businesses use their platform to send and receive payments. After being crowned a Unicorn a few months ago in October 2020, Razorpay, announced its Series E fundraise of $160 Million.
This financing round has tripled the company’s valuation to $3 Billion in less than 6 months, signaling one of the fastest increases in valuation for an Indian Unicorn.
Funding – Razorpay has raised a total of $366.6 million in funding over 7 rounds. Their latest funding was raised on Apr 19, 2021 from a Series E round. Razorpay is funded by a total of 29 investors. Matrix Partners India and GIC are their most recent investors.
Their other investors are as follows:-
- Sequoia Capital India
- Ribbit Capital
- Tiger Global Management
- Mastercard
Revenues & Losses – Razorpay saw its losses almost double in FY20, ended March 31, 2020, as its advertising and promotional expenses surged by nearly 5x and employee expenses more than doubled from the previous year.
While the company’s revenue grew by a massive 163% to reach INR 519.42 Cr, its expenses also grew at a similar pace to reach INR 525.41 Cr in the fiscal. In FY19, Razorpay had spent INR 202.15 Cr to earn INR 197.5 Cr, and the growth in revenue highlights just how quickly the digital payments ecosystem has grown in India.
Overall, even though the company’s loss increased by 89% in FY20 to INR 6.15 Cr, this is by no means a worrying figure considering the size of the business, as well as the untapped digital payments opportunity in India.
Acquisitions – Razorpay has acquired 2 organizations. They are as follows:-
- Opfin
- ThirdWatch
They have also invested in some startups which are as follows:-
- Shiprocket
- MSMEx
Controversies – Razaorpay hasn’t been involved in any major controversy as of now.
Present Time & Future Plans – Razorpay just recently announced to hire 650 employees across technology, product and business teams in the next 10 months, to meet the growing payment and banking needs of small and medium enterprises (SMEs) and freelancers.
Of the 650 new positions for both freshers and lateral hires, 350 will be towards expanding the engineering and product teams, and the rest will form the customer experience, sales and marketing forces, the company said in a statement. The company which currently has 1,300 employees hired over 550 people last year and witnessed a three times business growth in the pandemic-hit year.
“Our hiring plans are driven by more investment in product development, customer experience and new additions to the existing product suite so that we cater to the ever-evolving payment and banking needs of SMEs & MSMEs,” said Chitbhanu Nagri, Senior Vice President, People Operations, Razorpay.
“We are excited and looking forward to 650 more people joining us as we together work towards servicing the next 5 million businesses by 2022,” Nagri added. Razorpay is now working on building basic AI models or data science models through which the company can drive more value for different problem statements where it wants to reduce manual effort and manual activity.
It is also happening where it is important for the team to set up the infra and data structure to help the business grow. Razorpay has also partnered with Mastercard to launch ‘MandateHQ’ – a payment interface that will help card-issuing banks to enable recurring payments for its customers.
Razorpay, which is backed by Sequoia Capital, GIC, and others, aims to integrate MandateHQ with more than 50 banks in the next 12 months. The Reserve Bank of India (RBI) had issued a framework for processing e-mandates on recurring online transactions.
It has made AFA (Additional Factor of Authentication) mandatory for all recurring transactions below Rs 5,000 on debit cards, credit cards, UPI, and other Prepaid Payment Instruments (PPIs), and all stakeholders are required to ensure full compliance with the framework by September 30, 2021.
Conclusion – To sum it up, Razorpay has come a long way since the company was started. It has been growing at a healthy pace and it deserves all the growth since it solved a huge problem of online transactions.
The dream of providing each and every one with a simple, convenient and hassle free payment gateway has proved profitable as the business is exploding in all dimensions. After the pandemic, millions of businesses have shifted to the internet and they all need a trusted partner for online transactions which will be ultimately fulfilled by Razorpay.
Since the company is helping India to go digital, we wish all the very best for their future and we wish for a future where each and every business in India is connected to the internet with all the systems and processes.
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