Salesforce Invests in Razorpay: Boosting Indian Fintech

Razorpay Secures Strategic Investment from Salesforce Ventures

Bangalore-based fintech company Razorpay, currently valued at $3 billion following a funding round in April, has attracted investment from Salesforce Ventures.

Investment Details and Strategic Impact

Razorpay announced on Monday the receipt of a “strategic investment” from the venture capital arm of Salesforce. This investment is intended to bolster the startup’s position within the business banking sector.

While the specific investment amount remains undisclosed, Razorpay anticipates the deal will significantly contribute to industry advancements and stimulate financial expansion for small businesses over the coming year.

Razorpay’s Services and Market Position

Razorpay facilitates online money acceptance, processing, and disbursement for both small businesses and larger enterprises. Its services closely mirror those offered by Stripe in the U.S. and other developed economies.

However, Razorpay’s offerings extend beyond basic payment processing. The company has recently introduced a neobanking platform for issuing corporate credit cards and provides businesses with access to working capital.

Currently, with Stripe not yet operating within the Indian market, Razorpay has established itself as the dominant player and is now expanding its reach into Southeast Asia.

Statements from Key Executives

Harshil Mathur, co-founder and CEO of Razorpay, expressed enthusiasm about the partnership. “We aim to continue advancing India’s digital landscape and constructing a sophisticated payment and banking infrastructure for the future,” he stated.

“We are pleased to collaborate with Salesforce Ventures and Salesforce in India. This investment, alongside support from our current investors, will foster an ecosystem for seamless payments and banking integration.”

Mathur also indicated plans for expansion and the development of new products, with a focus on delivering these services to businesses in Southeast Asian countries.

Salesforce Ventures’ Investment Strategy in India

This marks Salesforce Ventures’ second investment in the Indian startup ecosystem. Previously, the firm led a $15 million Series C funding round for Darwinbox, a Hyderabad-based company.

Arundhati Bhattacharya, Chairperson and CEO of Salesforce India, commented on the accelerating shift towards a ‘less-cash’ economy, particularly influenced by the pandemic.

“The rapid growth in digital payments has created opportunities for technological innovation, and Razorpay has emerged as a preferred choice for numerous e-commerce businesses,” Bhattacharya noted.

“We are excited to support Razorpay in its mission to revolutionize digital finance, both in India and on a global scale.”

Growth and Future Prospects

Razorpay achieved unicorn status last year and has reported a monthly growth rate of 40-45% in recent months.

The startup is currently seeking a new round of financing and is reportedly negotiating a significantly higher valuation than its current $3 billion assessment.

Increased Investment in the Indian Market

Numerous global corporations, including Google, Facebook, and Microsoft, are actively pursuing strategic investments in India, the world’s second-largest internet market.

Microsoft recently finalized a strategic agreement with Indian budget hotel chain Oyo.

The Rise of Indian Unicorns

India has seen a record number of unicorns emerge this year, with 27 new companies achieving a $1 billion+ valuation, compared to 11 in the previous year.

This surge is fueled by increased investment from prominent global investors such as Tiger Global, Falcon Edge Capital, Temasek, SoftBank Vision Fund 2, and Coatue Management.

Furthermore, a16z is reportedly nearing an agreement to invest in Indian crypto startup CoinSwitch Kuber.