Interestingly Razorpay was not started with what it is known for today – “India’s one of the largest payment platform”.

 Interestingly Razorpay was not started with what it is known for today – “India’s one of the largest payment platform”.

Razorpay, a company Started in 2014, when there was very little or no digitalization across the payments industry in India and most of the market leaders believe that poor payment infrastructure would bottleneck the growth of e-commerce itself. A company who has pivoted 2 times, got a rejection from numerous banks, they took the risk of failures by running transactions on 2G internet to stay afloat has now become “India’s one of the largest payment platform”. As fascinating it feels after reading this, as interesting the story of RazorPay. Kindly have a proper read on this incredible story of “Razorpay”!!!


Started in 2014, when there was very little or no digitalization across the payments industry. India was a cash-based economy and people believes in dealing with cash because there was a huge fear of fraudulent activity, lack of transparency, and many more as in 2014 we don’t have any robust infrastructure, also the majority of the household don’t have access to the internet and if they have then it was very costly if we compare from today so to build a payment gateway infrastructure in those time and turned it into a unicorn is a very challenging task in India. Good things take time to come and this has been proven right again by the co-founder of Razorpay, Mr. Harshil Mathur, and Mr. Shashank Kumar as they turned Razorpay into “India’s one of the largest payment gateway and the 2nd Indian startup who made it to the Y-Combinator.

Those were the days of struggle

Harshil and Shashank were the IIT Roorkee grads. One day during a project they were working together even after graduating and working in their respective companies, as they both are very keen on doing projects together in their college days as well, they realized the need for digitalizing payments especially in India as it is very hard for SMEs to make payments across the region and that’s when the thought of starting Razorpay struck to their minds. But the main problem was India was not ready for digitalization while Flipkarts’s payment platform PayZippy has already a failure in 2014, and US-based PayPal was also struggling with regulations. If there is no problem, then there is no solution and that’s why Razorpay is born, India’s first payment gateway for startups and SMBs. They had spoken to numerous banks and partners to use their platform as a payment gateway before they started as it is not as simple as just building an app or a website where you just launched it and then see how your customer reacts, you have to make partners first – the bank in which the customers have their accounts and SME’s to whom the customer pays in exchange of the services. They have started from Jaipur being a cost-effectivity city in many ways as initially, they don’t have much cash to spend on the other expenses apart from building a prototype. So after numerous failed attempts they finally signed their first bank partner HDFC and they started running transactions on 2G internet with a high rate of failures also customers did not trust the mechanism as they preferred cash. But the duo conquered every challenge which had come on the way and build a successful product “RazorPay”. YC has also played a very crucial role in their journey as it’s not about the funds they got from the YC, it was the exposure they got from the top industry partners, their strong alumni base, who shares their experience, mentors you, and help you along your entrepreneurial journey.

Problems we have…

Since the duo started, they have listed down some of the major problems which they have faced in the payments industry and that’s what wanted to solve through the RazorPay platform. These problems were:-

  • Payments gateway and bank’s portal were not suitable for mobile devices.
  • Due to 2G internet, payment flows were interrupted.
  • You have been redirected multiple times while doing transactions.
  • Lots of the payment gateways including Banks as well were down a maximum of the times due to lack of robust infrastructure and routine maintenance.

Pivoted several times and finally hits the bullseye!!

Initially, they have launched themselves as a crowdfunding platform, after that they have started a school-fee management platform in Jaipur but in both of the businesses they realized the challenges in making and receiving payments, so they turned into a payment gateway network. Since its prototype stage, the company has built-in several features into its product; such as a cross-platform payment form that can be embedded using a single line of javascript, a payments dashboard for merchants, auto-updating of new and improved features, auto-filling OTP with Android SDK and more. In the second half of 2016, the startup has capitalized on several opportunities to introduce new features to further grow its business; key among them being, the demonetization move by the Central Government and the adoption of UPI (Unified Payments Interface). For example, its eCOD feature replaces Cash on Delivery by helping e-commerce companies accept payments other than cash, such as UPI or digital wallets, during the time of delivery. The feature has been designed in a way that the payment mechanism will generate a PIN number without Internet connectivity or wallet login, which the customer receives at the time of delivery, making the process as simple as paying cash. The best thing about this is they are sitting in the flow of money so if flow increases then you make more money and that’s what Razorpay did they begun to introduce more products after establishing their foot in the market. As initially, they are facilitating the consumer transactions but now they also focus on vendor payments and once the merchant came aboard they started cross-selling other solutions as well. In 2017, RazorPay has launched a lending platform especially for SMEs with instant and easy access to lenders – RazorPay Capital. In 2019, they started accepting international payments to help MSMEs in India. The entire range of international product offering were Payment Gateway, Payment Links, Payment Pages, Subscriptions, and Invoices. They had turned a simple payments platform into an end-to-end financial management suite. Recently, they have launched their new product RazorPayX which is a neo banking platform for businesses that helps owners and finance teams to automate the process to provide insights into the money flow. This new product helps in simplifying the payouts like Refunds for customers, Salary payouts, and Vendor payouts.

Success Mantra!!!

In the last decade, while the goal of fintech startups in the payments space has been on bill payments and the sales process, Mathur believes that the focus has now shifted to tech gaining an edge over everything else. “That’s why we don’t have a big sales team. Instead, we focus on building a great product team, and carving our niche on the technology front,” he shares. Believing that the secret to the company’s success lies in technology and lending a close ear to customer feedback, Mathur is clear that in the coming year, his goal remains to continue to grow the monthly transaction rate by 50 percent, and hopefully become a market leader in the next two to three years. Currently, they have over 200k small and large businesses, including Airtel, BookMyShow, IRCTC, Aditya Birla Capital, NSE, among others. In 2019, Razorpay has also acquired Opfin and Third watch for an undisclosed amount.


The online payment market is fairly crowded and the ongoing digitalization across this industry will make it very difficult for the ventures to remain in this business as customers are increasing and with them, the risk of fraudulent activities is also increasing even at a faster pace, so one who continue to improve their product capabilities and keep up with the pace will remain in the industry. RazorPay was doing this since its inception as they are very good at anticipating the ever-growing needs of the market and for that in 2017, Razorpay launched four products – Route, Smart Collect, Subscriptions, and Invoices, which allow businesses to manage multiple aspects of money movement including collection, reconciliation, and disbursal and also launches RazorPay Capital in the same year. But there is a famous saying “keep your friends closer and (I would say) competitor more closer” so below are some major competitors of Razorpay with their market share.

SWOT Analysis

Takes from TheVCStories

Till date, the company has raised $206mn in funding across the stages and they have their complete focus on further building RazorpayX, its business banking platform, and Razorpay Capital, its SME-focussed lending platform – the two main arms of RazorPay business and has over 850 employees. It charges 0.25 to 0.5 percent fees on every subscription collection transaction made through their gateway.

Currently having a valuation of over $1bn and already registered a growth of 2.14X FY19 vs FY18 in operating revenue as Razorpay has yet to file its FY20 statements. Fy20 will also witness tremendous growth as the company claims to have 35% monthly growth rate with having 100% growth rate in their neo-banking platform and already expecting a 100% increase in counts of the business partner as well. Razorpay has also processed payments volume of approximately $25bn annually and 18%-20% is coming from RazorpayX and Razorpay Capital.

Indian fintech is expected to touch Rs 6 trillion and India’s digital ecosystem is seeing unprecedented growth with online shoppers expected to cross 350 million (said by Ishaan Mittal, principal, Sequoia Capital India) and as the trend of digitization is penetrating India, Razorpay is playing a pivotal role in this transformation by enabling millions of merchants to accept digital payments in a frictionless and efficient manner. In the next two years, Mathur is projecting 35%-40% of its overall revenue coming from these two arms. They are also expecting a 4x growth rate in its revenue with a plan to increase its current user base by 15 lakh and to hire an additional 500 employees by the end of this financial year as the COVID-19 has accelerated the company’s payments segments. Interesting!! Right

The future is very bright for this start-up as odds are in favour for them. COVID-19 has made us realize the need for digitalization and the world is more aggressively moving towards a cashless society. As we have said above they are sitting on the flow of money and it is increasing significantly ever since, so if they are able to sail strategically then they will float smoothly otherwise everyone knows the results, likewise if Razorpay continues to maintain 3.5x then by 2024 it will become the market leader in processing payments.



The findings in the above article are solely done by the internal team of TheVCStories and have used only public resources to fetch out the needed information. The suggestion was given based on the analysis done by our internal team by making assumptions from the information set we have got. So it may vary from person to person as it is an opinion not a fact, kindly do your own analysis prior to making any final decision based on this.


We manifest the entrepreneurial and startup ecosystem for enthusiastic entrepreneurs by helping them build their entrepreneurial skills and encouraging them in job creation rather than finding ones. These episodes aim to provide much-needed guidance & motivation among the youth and bridge the knowledge gap.

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