Razorpay - Facilitating the SME's with effortless online payment mechanisms!

When smartphones and the internet took the world by surprise, it opened multiple opportunities for different sectors to pioneer the evolution of a more contemporary world. One of these sectors was the online payment industry. In the same field, with the vision to revolutionize the online payment mechanisms by providing transparent and developer-friendly APIs with hassle-free user integration, Razorpay was launched by Shashank Kumar and Harshil Mathur in the year 2014.

Razorpay is an online payment solution in India allowing businesses to accept, process and disburse payments with its product suite. It gives these business entities to access all the modern payment modes like credit and debit cards, net banking, UPI and popular wallets in the country namely JioMoney, Mobikwik, Airtel Money, FreeCharge, Ola Money and PayZapp. Razorpay online payment solutions can be integrated by both web and mobile applications.

Company Name Razorpay
Headquarter Bangalore
Sector Fintech
Founders Shashank Kumar,Harshil Mathur
Founded 2014
Website razorpay.com

Razorpay - About and how it works
Razorpay - Founders and Team
Razorpay - How did it start?
Razorpay - Business Model and Revenue Model
Razorpay - Competitors
Razorpay - Funding and Investors
Razorpay - Growth
Razorpay - Awards and Recognition
Razorpay - Future Plans

Razorpay - About and how it works

Razorpay logo
Razorpay logo

As mentioned earlier, Razorpay enables online payments by providing developer-friendly APIs and an effective integration process. Razorpay also offers a comprehensive dashboard to manage payments, as well as other plugins and integration suites for all major backend technologies and e-commerce platforms. In September 2017, Razorpay launched four products - Route, Smart Collect, Subscriptions, and Invoices, which allow businesses to manage multiple aspects of money movement including collection, reconciliation, and disbursal.

During the same time, Razorpay also announced that it was entering the SME lending space with its subsidiary venture called the Razorpay Capital. It is a lending platform that is designed to support Small and Medium Enterprises with instant and easy access to the lenders. This initiative is aimed at solving liquidity and cash-flow challenges by providing these firms with quick settlements and collateral-free loans. A beta version of the platform was launched in September 2018 and has already disbursed $30 million in loans and hopes to finish with an exit run rate of $100 million in March 2018.

Also, Razorpay added two new features in its services offered. These are respectively called ‘Partial payments’ and ‘Batch Uploads’.

  • Partial Payments- allows the end-users to make payments in part against a particular order ID instead of making the entire payment at once
  • Batch Uploads- lets the business entities generate and process links in bulk rather than creating individual links by uploading a single file containing collect order details.

Razorpay X (Comprehensive Banking Platform) is an AI-driven API banking platform, this product is set to fundamentally transform how businesses move money. The account number provided enables businesses to manage all forms of pay-outs (salary, vendor payments through NEFT, RTGS, IMPS, UPI) and receivables on Razorpay itself. A unique solution, businesses can now do everything and more with Razorpay that they were existentially doing with banks till now. Lately, there has been a significant enhancement to the existing online payment mechanism, Razorpay has also launched more new features to its checkout. These are essentially called Affordability, Personalisation and Native OTP.

Also Read: Instamojo - Aiding the Indian MSME's with effortless payment gateways!

Razorpay - Founders and Team

Razorpay is co-founded by  IIT Roorkee alumni Shashank Kumar and Harshil Mathur. This initiative was originated in Jaipur as a part of the winter batch of Y Combinator's startup program in 2015. Both these co-founders quit their respective jobs at Their start-up was incubated at Start-up Oasis in Jaipur, set up jointly by the Rajasthan Industrial Investment Corporation (RIICO) and IIM Ahmedabad’s Centre for Innovation Incubation and Entrepreneurship (CIIE).

Razorpay - How did it start?

This startup idea originated when the co-founders were working on the crowdfunding portal and in the process came to realize how muddled the online payment mechanism was in India. Following this, they changed tracks to work on this problem. “We realized that most online payment gateway solutions were extremely cumbersome to get started on, especially for start-ups and small- and medium-sized enterprises. When we contacted a few payment gateway companies, we were asked for our past operational records, presence of physical offices, security deposits, and very high set-up fees. Online reviews of most payment gateways in India confirmed similar bad experiences,” Said Mathur.

This, in turn, prompted them to build a start-up-friendly online payment gateway which was easy to integrate and use. After conducting some market surveys in the initial stages to verify the feasibility of the idea and then accumulating a positive response from potential customers, the co-founders decided on starting to work full-time on the Razorpay idea.

Razorpay - Business Model and Revenue Model

Razorpay charges 0.25 to 0.5 percent fees on every subscription collection transaction made through their gateway. However, the Razorpay 2.0 product suite contributes about 30% of Razorpay’s total revenue generation. This online payment portal is now looking to increase its average product adoption from one to two.

Also Read: Best Online Payment Apps You Should Use In India

Razorpay - Competitors

The online payments market is fairly crowded when it comes to ventures operating in the sector. In the market scenario like this, Razorpay competes with both well-established and new entities like InstaMojo, PayuMoney, Oxigen, Tapzo and Citrus to name a few.

Razorpay - Funding and Investors

  • In June 2019, Razorpay raised its Series C funding worth $75 million in the form of equity financing. This funding round was led by a financial technology-focused investment firm Ribbit Capital. This equity financing round was also co-led by Sequoia Capital.
  • In January 2018, Razorpay raised Series B funding of $20 million led by its existing investors namely Tiger Global and Y Combinator, along with participation from Matrix Partners.
  • In July 2016, MasterCard is believed to have made an undisclosed investment in this online payment portal.
  • In 2015, Razorpay had raised its Series A funding worth $9 million which was again led by Tiger Global and participation from Matrix Partners. And during the same time, it had also secured a seed funding worth $2.5 million from 33 big names in the investor circle namely Y Combinator, Kunal Bahl & Rohit Bansal, Punit Soni, Amit Gupta & Naveen Tewari, Kunal Shah & Sandeep Tandon.

Razorpay - Growth

  • Recorded exponential growth rate since inception
  • Currently powers more than 170,000 small & large businesses
  • Razorpay clients include Aditya Birla Capital, NSE, and Vogue India to name a few
  • Recording a healthy growth rate of 15% to 20% month-on-month
  • Merchant count geared up to 3,00,000 in 2019
  • Claims to be growing at 30% to 35% month on month

Razorpay - Awards and Recognition

The various awards and recognitions received by Razorpay overall these years include:

  • 2018 - Recognised as one of India's Top 50 Mid-Sized Workplaces in the category of “Great Places to Work.”
  • 2018 - Awarded by IAMAI as the “Best Digital Payment Facilitator.”
  • 2018 - Awarded by LinkedIn as India’s 25 Most Sought-after Companies to Work for.
  • 2017 - Was a runner up for the “Financial Express Software Product of the Year.”
  • 2017 - The co-founders Shashank Kumar and Harshil Mathur got selected for the 'Forbes 30 Under 30'.
  • 2017 - Backed the Bronze Award for the Best POS Innovation by PYMNTS.com.
  • 2016 - Made it in the Nasscom 'League of 10' Companies.

Also Read: Best Payment Gateways in India for Your Business

Razorpay - Future Plans

Recently, Razorpay is focused on capturing the Indian market. As per their future plans, the company aims to enter the South East Asian markets too. "Our technology is replicable across other emerging markets too which face similar issues." Said Harshil.

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About Vidhi Punamiya

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