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Razorpay funding

Razorpay announced that it has raised $160 million from Sequoia India and Singapore-based GIC in a funding round growing the valuation of the payment gateway startup threefolds to $3 billion in less than six months.

Current investors Ribbit Capital and Matrix Partners also participated in the funding round, marking the huge interest among risk investors in India’s fast-growing fintech and digital payments industry.

Razorpay had entered the unicorn club with over a billion-dollar valuation last October after raising $100 million at a valuation of just over $1 billion in a round co-led by Singapore’s sovereign wealth fund GIC and Sequoia Capital.

Razorpay is one of the fastest startups to observe a swift rise in its valuation.

Other fintech companies like Cred, Pine Labs, and Groww have also recorded an accelerated rise in valuation.

The company plans to utilize the freshly raised funds to scale in South East Asian markets such as Malaysia, Indonesia, and Singapore, Chief Executive Officer Harshil Mathur said.

The company is also in the process of acquiring an enterprise Software-as-a-Service (SaaS) company for merchant management and will recruit around 600 people both in India and overseas to expand its neo-banking business, which in recent months has observed significant traction, said Mathur.

Razorpay is a payment service provider that assists businesses to automate collections by its gateway service while helping small businesses control money flow. Its clients include food delivery platforms Swiggy and Zomato, as well as Facebook, Cred, ICICI Prudential, and Ola.

Besides, the company stated it offers payment solutions to more than five million small merchants. While its neo-banking platform, Razorpay X, which aids merchants to run current accounts and access credit from partner banks, processes loans worth Rs 700-800 crore every month. The company also provides corporate credit cards in partnerships with authorized lenders to startups in need of working capital.

Speaking about the valuation boost, Mathur stated that money is abundant for fintech startups that are operating their unit-economics well, but investors are keeping away from early-stage startups with riskier business models.

The company has earlier raised $206.5 million in four investment rounds since its conception in 2014. It received $75 million in series C funding in 2019 led by Ribbit Capital and Tiger Global.

The fintech competes with the likes of BillDesk, CC Avenues, Paytm, and PayU in the payment gateway business, and with others such as Jupiter, Niyo, and Open in the business of neo-banking.

Razorpay is simplifying the money flow for small businesses and is helping them to scale their business. The latest funding has not only boosted the company’s valuation but has also presented huge growth opportunities.

Shishir Gupta, Founder and CEO, StartupLanes

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