Razorpay Software Pvt. Ltd said Monday it has raised $100 million (Rs 727.4 crore) in a new funding round that has catapulted the online payment gateway provider to the famed unicorn group of startups with a valuation of at least $1 billion.
The Series D funding round was co-led by Singapore sovereign wealth fund GIC Pte Ltd, a new investor, and existing backer Sequoia Capital, Razorpay said in a statement.
Other existing investors Ribbit Capital, Tiger Global, Y Combinator and Matrix Partners also participated in this funding round, it added.
Razorpay has become the latest fintech startup to achieve the unicorn status this year. Earlier this year, Pine Labs and most recently Zerodha also turned into a unicorn. Outside the fintech sector, ed-tech startup Unacademy joined the unicorn club last month after it raised $150 million in a new funding round led by SoftBank.
The fintech firm said it will use the fresh capital to scale up its two new product lines: neo-banking platform RazorpayX and lending arm Razorpay Capital. It will also channel the fresh capital towards new initiatives related to small and medium enterprises (SMEs) and hiring 500 employees by the end of March next year.
Razorpay said it recorded 300% growth in its business during the last six months of the coronavirus pandemic. CEO and co-founder Harshil Mathur said the neo-banking platform itself grew 100% in the past six months.
"Neo-banking is a nascent but fast-developing space in the Indian market and has the potential to become the one-stop platform for a business’ banking needs," he added.
Choo Yong Cheen, chief investment officer for private equity at GIC, said India has made significant strides in establishing a digital payments eco-system and Razorpay has established itself with its strong focus on customer experience and product innovation.
Ishaan Mittal, principal at Sequoia Capital India, said India’s digital ecosystem is seeing unprecedented growth with online shoppers expected to cross 350 million by 2025.
The trend of digitization is penetrating India across social strata and geography and Razorpay is enabling millions of merchants to accept digital payments in an efficient manner, he said.
Razorpay was set up in 2013 by IIT Roorkee alumni Shashank Kumar and Mathur. The company had raised $75 million in a Series C funding round in June last year. It raised its Series B funding in 2018.
In July 2016, the company received an undisclosed amount of investment from American payments and financial services company MasterCard. Since late 2015, the startup has been working with the MasterCard Start Path programme that accelerates e-commerce and fintech startups and gives them access to MasterCard’s network.
Prior to that, Razorpay raised $11.5 million from Tiger Global, Matrix Partners and Y Combinator.
Razorpay has 33 angel investors including Snapdeal founders Kunal Bahl and Rohit Bansal, and InMobi founders Abhay Singhal, Amit Gupta and Naveen Tewari.
The fintech segment, particularly digital payments and lending, has become stronger than ever after the coronavirus outbreak as online transactions surged, top industry executives said at a VCCircle virtual event recently.
A bunch of other fintech startups have also raised early- and growth-stage funding during the pandemic.
Just last week, Uni, a fintech startup in stealth mode co-founded by former PayU India CEO Nitin Gupta, raised $18.5 million in its seed funding round.
Smallcase Technologies Pvt. Ltd, a capital markets-focussed financial technology startup, secured $14 million in a Series B round in September. Last month, Vulcan Capital led seed funding in fintech startup Qapita.
In August, FPL Technologies Pvt. Ltd, founded by three former ICICI Bank executives last year, raised $10 million from new and existing investors in its Series A funding round.
In May, SME-focussed fintech startup Khatabook mobilised $60 million in its Series B funding round led by Facebook co-founder Eduardo Saverin's B Capital.