‘Makes sense to list in a market where people know you’

Harshil Mathur, co-founder & CEO, Razorpay.
Harshil Mathur, co-founder & CEO, Razorpay.


  • In an interview on the sidelines of the Global Fintech Fest 2023 in Mumbai, Harshil Mathur said Razorpay is progressing organically towards breaking even, with its payments business nearing this milestone

Fintech company Razorpay is seriously considering going public in India and is evaluating ways to do it, says Harshil Mathur, the co-founder and chief executive of the Wilmington- and Bengaluru-based unicorn that counts Tiger Global Management Llc, Peak XV Partners (formerly Sequoia Capital India & SEA) and GIC Pvt. Ltd, among others, as its investors. In an interview on the sidelines of the Global Fintech Fest 2023 in Mumbai, Mathur said Razorpay is progressing organically towards breaking even, with its payments business nearing this milestone. Edited excerpts:

What steps have you taken to enhance unit economics and approach profitability?

Though we are talking about this today, we have been thinking about this from day one. We are in a business-to-business (B2B) domain. Within the B2B domain, you can’t say that I’m investing today and I will make money tomorrow. That has been our strength at Razorpay. Our burn has always been negligible. Most of the fundraising that we have done was to fund acquisitions and consolidations and stuff like that. And today, we are very comfortable that we are not dependent on any external source of funding till we go public. So, we don’t need to raise money ever again. Whatever money we have raised, we have enough and more for our official needs. We might raise if we want to do some acquisitions or some consolidation, but not from the operational needs of the company.

So, at Razorpay, we did not have to take any tough calls that most of the other companies were forced to take. And we’re fortunate to be in a position where we didn’t have to do any lay-offs, any cut-downs, and stuff like that. Our business is on an organic path to break-even. Our payments business has almost broken even though we continue to spend a little money on the RazorpayX and Razorpay Capital side of things, as it is still fairly early days. But it is still fairly low for us to be worried about.

What are your plans for going public?

It is all kind of related, and we started thinking about going public, and it’s still a long timeline when you start thinking about where and how. And it made sense to look at India because this is the place where people know us. This is the place our brand is present. So, it makes sense to do that in the market where people know and love you.

And possibly get a better valuation?

Valuation is one side of it. But even US markets have deep pockets, and for valuation, one would say it is a deeper market with a deeper capital pool available. But from our perspective, it is fairly simple that this is a place where we operate, and people know us here. Why do you want to go around and do road shows in a market where nobody knows us? Correct? Let us do it in a market where people know and use us on a daily basis. So, it is a work in progress. There is a lot of complication and complex rules and challenges when you move from the US to India, especially with this size of the business. So, we’re figuring out a way around it, and it will take some time. It is a lengthy process and requires a lot of approvals and compliances to meet, but we’re on it.

The government is likely to welcome companies flipping back with some tax sops. Has there been any discussions with the stakeholders in the government?

We have spoken to people in the policy circles of our trade, and of course, they are welcoming. The challenges on the Indian side are pretty low. The biggest challenge is the tax impact, which is actually outside. But yeah, I will, of course, welcome if there are any tax sops and stuff like that, but honestly, that’s not the big challenge. But one way or the other, we want to figure out how to come back whether we get something special or not.

Will you be giving some of your early investors liquidity ahead of the IPO with a new funding round, whether primary or secondary?

Nothing as of now. We did a secondary in the middle of 2022, which was not too long ago. We did it for some employees and for some of our early investors. But there’s no push right now. There’s not a lot of demand right now for doing it.

What are the inorganic growth opportunities you are looking at? What are the gaps you are trying to fill?

See, our core focus is B2B. We are building a lot of services on the B2B side. So, we tend to look at opportunities and products that can help serve merchants and internet businesses better that we might take, let’s say, two to three years to build out if you can buy it, plug it in the ecosystem, that’s a good outcome for us.

Which are the brightest spots in the business that you think would help propel growth?

Our core business continues to grow well. We are still growing more than 40%-50% year over year in terms of revenue and in terms of volume, and that is fairly high, and that’s just on the payment piece. We are also seeing a lot of growth on the neo-banking and capital side of things. Also, the offline piece is a very high-growth market right now.

What are your overseas expansion plans?

We launched in Malaysia. It’s the first payment gateway company to launch there that’s built out of India. We are seeing great traction there. And in fact, it has built our confidence that we can launch in other markets as well, much faster. So, we’re looking at Indonesia, the Philippines, and Vietnam. The complex part is that each of these countries needs its own regulatory approvals and licenses. So, that’s a work in progress.

The regulatory overhang in the Indian business is also significant. What are your thoughts?

Regulators are coming to events like these and holding industry sessions, having discussions with everyone. I think that just shows that they are open to a dialogue. See, regulators also have their own challenges that we need to solve for the ecosystem. And they tend to focus on that. I think we have a very pro-consultative regulator where every new regulation that comes out is never pushed without an informal draft, they accept comments. They do roundtables, and then they put it out. So, from their perspective, I think it’s a very conservative approach.

At the end of the day, they’re doing it in the right way.

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