B2B Fintech startup Razorpay has raised $75 million (about Rs 525 crore) in its fresh funding round. The round was spearheaded by Ribbit Capital, a fintech focused investment firm. The round also saw the participation by Sequoia Capital, becoming the new investor in the Bengaluru based company. Existing investors Tiger Global Management and Y Combinator’s Continuity Fund also participated in the round.
Sources privy to the matter claimed that the latest round has propelled Razorpay’s market valuation to nearly $450 million. However, Razorpay has refused to confirm the exact valuation it commended following the conclusion of the latest funding round.
The company plans to utilize the latest capital infusion for consolidating its two new products – Razorpay Credit and Razorpay X.
Harshil Mathur, CEO Razorpay, told Economic Times that he expects nonpayment gateway businesses like Razorpay to contribute “an estimated 40% to our overall revenue over the next two years.” He also said that the company will be increasing its employee counts to 700 by end of the current financial year.
As for Razorpay X then this is a new product that offers flexible payment solution and is still in beta stage. Although the product will be officially launched in the proceeding months, it still has 1,500 merchants on board.
Razorpay is among the many successful startups that symbolize India’s fintech growth story. India’s fast-growing economy and increasing internet proliferation are providing the needed stimulus to the fintech sector. Apart from Razorpay, scores of B2C and B2B fintech startups have raised funds in the apparent sign of investor’s strong confidence in the sector.
However, the ongoing credit crunch plaguing India’s NBFCS may dampen the growth of the fintech sector. The NBFC crisis has been triggered by the financial calamity brought forth by the debt-ridden infrastructure and finance company IL&FS. IL&FS has debt of whopping 90,000 crore that is threatening to balloon into full-fledge financial crises.