As the tech ecosystem rises and develops in the Indian nation, the level of competition also continues to steadily rise in the market, with an increasing number of entrepreneurs now willing to take a shot at something off the beaten track.
The rise of technology with all its added benefits has paved the way for a world of scope and opportunities for a variety of sectors, laying the groundwork towards the progress of the modern world. One such sector is that of the online payment industry.
We’re long past the days when money transfer was an elaborate and tedious process. The procedure can now be undertaken in a simple swipe of our fingers, owing to the expanse of platforms that have been attempting to set up effortless and safe online money transfer benefits. When we think of such platforms, one of the first names that crosses our mind is that of Razorpay, a payment gateway platform which offers a safe and secure payment system for all users in India. The platform has recently been rising up the charts to emerge as a dominant name in this sector owing to it recently emerging as a unicorn among the Indian startups in this year.
Razorpay allows its users to access multiple payment approaches via their platform like net banking, debit card, credit card, and even wallets such as Ola Money or Airtel Money.
Through this blog, we will provide you a gist about the platform of Razorpay, about its founders, its business model, its funding, its success story, its origin, as well as its growth.
You can take a look at our latest success story of Nykaa.
“Most payment platforms take their APIs from banks. Then, they integrate with banks and build a further layer. Hence, they all look similar. But with Razorpay, we got to build the product first, keeping bank integration as the black box. We discussed what the merchants want and what our customers demand. We answered these and built our product,”
- Harshil Mathur, CEO, and Co-founder, Razorpay to Your Story
Razorpay is an online Payment Solution platform in India which offers a swift, safe, easy and economical way for businesses to accept and disburse payments digitally. The platform offers these business entities access to a variety of online payment modes such as credit and debit cards, net banking, UPI and a plethora of leading wallets in India which include JioMoney, Mobikwik, Airtel Money, FreeCharge, Ola Money as well as PayZapp. The platform provides a comprehensive dashboard for handling payments for users and is applicable for both web and mobile applications.
In 2017, the platform had launched four products namely Razorpay Route, Razorpay Smart Collect, Razorpay Subscriptions and Razorpay Invoices. These products attempt to handle tasks such as cash flows, disbursement of money, automating NEFT, bank wires as well as collection of scheduled payments.
Yet another subsidiary venture of the platform is Razorpay Capital which is a lending platform that backs businesses with instant loans to aid them in resolving their cash flow issues.
The platform has also included two new features in the services it offers namely ‘Partial payments’ and ‘Batch Uploads’, where Partial Payments feature permits the end-users to perform payments in sections against a certain order ID as opposed to performing the complete payment together and the Batch Uploads feature allows business entities to produce and process links in batches instead of setting up separate links by uploading distinct files which accommodate the collect order information.
Yet another leading product of the platform is RazorpayX which is an AI-driven API banking platform. This product facilitates businesses with a fully-working current account which can be adopted by them for automating payroll, bank transfers, sharing invoices, and so on.
RazorpayX Payouts, is a product of the platform which allows businesses to disburse payments from vendor and customer payouts to employee salaries, easily and promptly.
Razorpay’s leading products
Some of the leading clients of Razorpay include Oyo, Cred, Facebook, Flipkart, Zomato and Swiggy, Byju’s,Zilingo, Yatra and Goibibo, as well as the telecom giant Airtel.
We would also recommend reading the success story of CRED.
“While building a scalable startup, there are no shortcuts to success”
– Harshil Mathur, co-founder and CEO, Razorpay to Entrepreneur
Razorpay was founded by Shashank Kumar as well as Harshil Mathur.
Having studied from Patna’s St Xavier’s High School, Shashank graduated with a Computer Science degree from IIT Roorkee. While studying at IIT, he also took up a summer internship at the University of Minnesota as well as at Microsoft. He also took part in Y Combinator in 2015.
Prior to setting up Razorpay Shashank had been a software development engineer at Microsoft. He had also joined SDSLabs and taken up the post of its Vice President for a year.
Alongside Shashank, Harshil is also a graduate from IIT Roorkee and had been an employee at SDSLabs. He also worked as a Wireline Field engineer at Schlumberger for a couple months. Presently, Harshil occupies the position of CEO at Razorpay.
The Origin of Razorpay
Harshil and Shashank had been introduced to each other at IIT Roorkee and the duo set up Razorpay in 2014. As the two deduced the struggle that new startups encountered in accepting money online before, they started looking into opportunities relating to businesses aiding in payment processing. There were very few payment processing firms in India then, and startups were required to generate a lengthy document list.
Razorpay’s initial team had been of merely 11 people who used to share a solitary apartment as the platform’s co-founders struggled to meet and convince more than 100 bankers to collaborate with them. The discussions had been slow and continued in a predicament for a long time.
“It took us about a year and rejection from some 100 bankers to get the first approval from a bank on our first prototype, there were times when we mulled over switching to e-commerce or a similar sector where we could just build an app and launch instead of waiting for somebody to give an approval.”
- Harshil Mathur, Co-founder, and CEO, Razorpay to Entrepreneur India
Take a look at the success story of Udemy.
Razorpay Business Model
As reported by Your Story, the platform charges about 0.25 - 0.5 percent fees for each subscription collection transaction which takes place via their gateway. Through the set up of version 2.0, the platform has prompted multiple revenue streams heading ahead. The company charges as much as two percent on every transaction carried out via their payment gateway.
Razorpay’s Recent Growth
Amidst the cuts in salaries, the constant layoffs as well as downsizing of businesses taking place as a result of the COVID induced restrictions, a fresh batch of micro-entrepreneurs, which also includes freelancers and businesses headed by individuals, has been emerging.
“We saw the Covid-19 pandemic as an opportunity as the digital transformation that would have happened over the next 2-3 years was going to happen over the next six months, we had a broad arsenal at our disposal that enabled us to make the opportunistic bets.”
- Harshil Mathur, Co-founder, and CEO, Razorpay to Entrepreneur India
Razorpay has narrowed various sectors to concentrate on for the purpose of customer acquisition, which include e-commerce, ed-tech, gaming as well as B2B startups which are aiding businesses in digitizing. Small enterprises like grocery stores, schools and offline sellers who are unfamiliar to online transactions and wish to digitize theirs, are another arena where the platform has located business opportunities.
Presently as confirmed by TOI, the platform powers payments for about 5 million merchants which also include Airtel, Ola, Zomato, BookMyShow and so on, in contrast with 1 million in 2019.
As reported by Business Standard in the month of September, the platform has recently set up a fresh lending service for small businesses that are on the lookout for different ways of gaining access to easy and accommodating credit which would aid the businesses in maintaining continuous cash flow and also in repaying the borrowed interest with malleable timelines.
The platform has also set up a collateral-free line of credit, ‘Cash Advance’ for businesses. This line of credit allows MSMEs to borrow working capital with a credit limit of Rs 50,000 to Rs 10 lakh, within 10 seconds through the Razorpay dashboard, in accordance with the credit history of the business.
Razorpay has also recently set up the Payment buttons product on their platform for startups and small businesses. This product allows businesses as well as freelancers to include a single code line on their website or blog and go live with an integrated payment gateway, in under 5 minutes.
The platform had set up its corporate credit card in 2019 and aims to expand to include newer businesses and corporates.
You can also sneak a peek at our success story on Dineout.
Recently as reported by Mint, in the month of October, Razorpay obtained $100 million in its latest funding round which was headed by Singapore’s sovereign wealth fund GIC as well as the platform’s existing investor Sequoia India. With this funding, the platform has joined the exclusive batch of unicorn startups.
The platform’s leading investors include Ribbit Capital, Tiger Global, Y Combinator, Matrix Partners, Singapore's sovereign wealth fund GIC, as well as Sequoia India.
Presently the platform is valued at over $1 billion following its most recent funding round. As of now, Razorpay has obtained about $206 million in total after all its funding rounds.
"We at Razorpay have always been a payments company, and our focus has always been financial solutions. With this funding we want to go further in our reach. We aim to build deeper tech products and solutions, as we always have done."
- Harshil Mathur, Co-founder, and CEO, Razorpay to Your Story
In the present day, almost all payment gateways now have the choice of selecting Razorpay as a payments provider. In the upcoming months, the platform has grand plans to further build its two products RazorpayX and Razorpay Capital and it aims to adopt its recently raised capital to do the same. With its future plans underway, a lot of promise has been displayed by the platform for paving its way towards further growth and popularity in the near future.