Payments Company Razorpay has raised $20 million in a round led by existing investors Y Combinator and Tiger Global as well as Matrix Partners, as it looks to fight off competition from global players such as PayPal and Stripe.
Razorpay had earlier raised $11.5 million, including a strategic investment by Mastercard in 2016.
CEO Harshil Mathur said Razorpay is focused on domestic players and will use the funding to scale up recently launched services for businesses.
Company had launched new products such as payment disbursement, recurring payments, payment collection and invoice management for businesses, as a means to create new revenue channel, which is expected to bring 30% of revenues by this year.
Harshil Mathur said “Stripe and PayPal are likely to focus on global companies serving Indian markets. We are focused on domestic businesses. This is the first time that Y Combinator has done a follow-on round in a start-up in India. The company is also looking to experiment with lending this year, mostly through a marketplace model and is also open for acquisitions in the space.”
Razorpay’s revenues grew 15x in 2017 over the previous year as it expanded its merchant base from 20,000 to 65,000 merchants, including the likes of Goibibo, Yatra, Zomato, Zoho, DSP BlackRock and Zerodha. The company says it will reach a base of 2 lakh merchants in 2018. The payment gateway sees that largest volume coming from the food-tech sector, while the travel sector contributes the largest value of transactions.
Anu Hariharan, partner at Y Combinator’s Continuity Fund, which made the investment, said in a statement “The Company’s vision and execution over the past three years has shown tremendous results, especially for an India-focused SaaS company. With the online and digital payment space going through a massive transformation in India, their business is only going to grow further”.