As students in IIT-Roorkee Harshil Mathur (CEO & Co-Founder) and Shashank Kumar (Co-Founder), were part of the SDS coding club. When they reconnected after two years, they began work on Razorpay initially as a crowdfunding platform. “It was more of a hobby, and we still had our day jobs”, says Mathur in an interview with Subhalakshmi Roy. When they wanted to accept payments, they realised how difficult it was for a startup to accept payments. Most of the process was built for large enterprises and that sparked the idea for a platform that would help startups.

“Banks and large financial institutions didn’t understand startups and viewed them as risks. We thought that a lot of these startups would grow up to become big companies and wanted to tap into the market early and build a large platform around it. This was the genesis of the idea.” After considerable effort and time in understanding the regulated domain of payments, they launched the company and saw gratifying responses to their online invitations to try out the platform. More traction ensued when they moved from his parents’ house to a co-working space in Jaipur and when they got seed fund from Y Combinator and Tiger Global, they had to expand the team quickly and this necessitated their move to Bengaluru, a city which not only has the best tech ecosystem but also the most number of startups who are Razorpay’s targets. “It made sense to stay close to our clients”, says Mathur.

The company has done things differently from the start. It gained traction for its core payment gateway, which was very different from the competition. Specifically for startups and for mobile payments, it was built for the current generation.

Setting out to expand, it eschewed entering every vertical, choosing instead to go deeper into the domain with the merchants with whom it was working. “We spent a lot of time talking to our customers, asking them what more they needed and what were their pain points in payments and money. That’s how we keep building”, says Mathur.

From these discussions, Razorpay evolved from just being a payment gateway to converged payment solutions in September 2017. Rebranded as Razorpay 2.0, it soon began contributing almost 30 percent of the company’s revenue with value-added services that include:

• Razorpay Route: Designed to control the flow of money, it provides an efficient end-to-end solution for businesses to manage marketplaces, split payments, and facilitate vendor payouts
• Razorpay Smart Collect: Built to automate NEFT/RTGS/IMPS collections, it allows businesses to generate virtual account numbers in order to reduce manual intervention, as all collections through bank transfers are reconciled in one place
• Razorpay Subscriptions: Developed to benefit businesses with recurring billing models, it helps manage scheduled payments, create different pricing plans and track all payment activity from a single subscriptions platform
• Razorpay Invoices and Payment Links: Designed as an interactive solution, it efficiently collects payments from customers for merchants who do not have a website or an app.

It recently rolled out several new offerings:

• Razorpay X is an AI-driven API banking platform that enables businesses to manage all pay-outs such as salary, vendor payments, and receivables on the Razorpay platform, doing away with the need to go to a bank’s portal. An extension of this is the exclusive X Club. Open only to the early-stage startups that are a part of the X platform, it connects them with mentors, coworking spaces, cloud-hosting platforms, and other enablers.
• Razorpay Capital, the lending platform, is integrated with the existing platform and offers both short-term working capital loans as well as long-term business loans. The loans are collateral-free and promise instant settlements, which reduce operational gaps for businesses to 12 hours or less. “We are trying to solve all the challenges that a young startup faces, so that they can just focus on their business,” says Mathur.

After a Series B funding, from the same set of investors, it began an aggressive reach to the market, and fast-tracked its growth, going from 20,000 businesses in January 2017 to 2,00,000 businesses in February 2019. Mathur points out “We power the payment acceptance of some of the largest businesses such as Airtel, Goibibio and Yatra, and top unicorns and startups in the country such as Zomato, Swiggy, Oyo and BookMyShow. But more important is the impact we have made on the ground level by enabling young startups to accept digital payments from the very first day of business. We onboard 200-300 startups each day. The scale and the traction is because we have improved the process significantly.”

The proverbial cash registers, if they hadn’t been outmoded by the digital players like Razorpay, would be ringing.