Online payment gateway Razorpay has raised $9 million (about Rs 58 crore) in a round led by Tiger Global that also saw participation from Matrix Partners, as part of a plan to further build its product and enter other segments of the payment industry
.Razorpay, which was incubated at Silicon Valley's top accelerator Y Combinator, also disclosed that it had earlier raised $2.5 million (about Rs 16 crore) in seed funding from Matrix Partners, Y Combinator and 33 other angel investors including Ram Shriram, an early Google investor; Jeff Huber, senior vice president at GoogleX; and Justin Kan, a partner at Y Combinator.
"These guys have a fanatic focus on making online payments simple and their product speaks volumes about their brilliant team," said Kan, partner at YC and founder at Twitch, a live streaming video platform now owned by Amazon.com.
Razorpay validates internet payments via credit or debit cards, net banking and digital wallets from the end customers in real time. "Our patented technology will greatly help in achieving higher transaction success rates and faster checkout time, especially on mobile devices," said cofounder Shashank Kumar. The firm, with a 15-member team, moved from Jaipur to Bengaluru a few months ago.
CEO Harshil Mathur, said merchants have experienced 30 per cent higher success rate in completing transactions with Razorpay's gateway as it supports payments at 2G speeds, among other things. "We believe in the founders' vision of taking a technology-first approach and are excited about partnering them. We remain extremely positive on fintech in India and will take multiple bets in the space," said Vikram Vaidyanathan, MD at Matrix Partners India.
This year, startups in financial technology have raised $1.25 billion, an eight-fold jump over the amount last year, with Paytm bearing the single largest influence with a funding of $890 million. Citrus Pay raised $25 million this month. "So far there has been little innovation from existing payment gateways in India. Everyone has been sales-focused, not technology-focused," said Mathur. The company's solution, he said, is the only one in the country that does not redirect a customer away from the merchant's website. Since the launch of Razorpay in March, it has seen over 1,800 merchants use its platform.