Unlike many of its competitors, Razorpay is focused: on both its customer segments and achieving profitability. For instance, the company only serves businesses, eschewing India's large but crowded retail banking market, providing payments, lending and credit card services. Razorpay's co-founder and CEO Harshil Mathur, told Fortune India: "We have always stayed true to what we do, which is to create finance for businesses, and that has helped us to stay ahead of the curve."
He told Mint that Razorpay will use its newly acquired funds to "focus on going deeper into the Indian market." The company aims to "broaden our product portfolio to grow our business and achieve profitability," he said. An IPO would come after reaching the profitability milestone, perhaps in three to five years' time.
Early on in the pandemic, Razorpay's revenue and volume fell roughly 30%. But then the company capitalized on the rush to online banking, attracting a slew of new customers, including Instagram stores, small schools and local grocery stores. Razorpay has already processed US$25 billion in payments this year, compared to US$5 billion for the whole of 2019.
Razorpay tends to highlight its large base of SME customers, but it has some big-name clients too, including Facebook, Flipkart, Oyo Airtel, Zomato and Swiggy. In total, Razorpay expects to have 10 million of them as customers by next year, double the current number.
While Razorpay says its payments business is near a break-even point, its other businesses will take longer to reach that milestone, perhaps another two to three years. Somewhat confusingly, Razorpay's lending arm, Razorpay Capital, is separate from its so-called "neobanking" arm Razorpay X. The latter is more comprehensive, with Razorpay managing clients' bank accounts and "the entire financial ecosystem." The company says that it wants to focus on services like vendor payments, salary payments, tax payments, and reconciliation.
Razorpay is the fifth Indian fintech to reach the unicorn milestone after BillDesk, PhonePe, PolicyBazaar and Paytm.