Home / Companies / Start-ups /  Razorpay looks to raise up to $250 mn, eyes $4 bn valuation

NEW DELHI : Fintech unicorn Razorpay is in talks with large global funds to raise $200-250 million at a valuation of around $4 billion, two people familiar with the development said.

The payments platform is in talks with hedge funds such as Tiger Global Management, Coatue Management, D1 Capital Partners and other technology-focused funds, including DST Global, Dragoneer Investment Group and Falcon Edge Capital, the people said on condition of anonymity.

The company counts Sequoia Capital, Matrix Partners and Rabbit Capital among its backers. It wasn’t clear whether any of the existing investors would sell their stakes in the upcoming transaction.

Razorpay raised $160 million this year at a valuation of about $3 billion, a move aimed at scaling up its business banking unit.

Email queries sent to Razorpay and investors did not elicit any response till press time. Tiger Global declined to comment.

The fundraising activity for payment startups has gained pace after the PayU-BillDesk transaction, said one of the people cited above. Consumer internet group Prosus’s payment arm PayU agreed to acquire Indian payment gateway service provider BillDesk for $4.7 billion. The deal, announced on Tuesday, marks the largest exit by an Indian startup through an acquisition.

“Players such as Razorpay are looking at acquisitions on the talent pooling side, besides targeting a bit matured places in the B2B SaaS (software as a service) space," the second person said.

Razorpay, set up in 2013 by Indian Institute of Technology (IIT)-Roorkee alumni Shashank Kumar and Harshil Mathur, has raised $366.5 million in investments to date, including $100 million in a Series D funding in 2020.

Revenue grew 40-45% month-on-month throughout 2020 and the platform processed $40 billion worth of transactions last year, Razorpay said.

Razorpay’s customers include Facebook, Bharti Airtel, Ola, Zomato, Swiggy, Cred, and ICICI Prudential. It competes with some heavily funded players such as IPO-bound Paytm, besides PayPal, Payoneer, and Stripe.

Investments in Indian fintech startups have seen a 25% increase this year, according to a KPMG report. Some of the large transactions in the fintech segment have taken place this year.

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