Razorpay, a leading merchant payment processing unicorn, is gearing up for an Initial Public Offering (IPO) in approximately two years following the closure of its reverse flipping process to India within the next six to twelve months.
“We have already commenced the process of reverse flipping to India, and this is expected to take anywhere between 6-12 months to complete. We have factored in the costs and other aspects… We anticipate the IPO to be scheduled two years after our businesses break even,” stated Harshil Mathur, the co-founder and CEO of Razorpay, in an interview with Moneycontrol.
Razorpay initiated the process of relocating its parent entity from the United States to India in May 2023, ahead of its plans to list on Indian stock exchanges. Established in 2014 by Shashank Kumar and Mathur, Razorpay has garnered support from investors such as Y Combinator, GIC, Sequoia Capital India, Ribbit Capital, Matrix Partners, MasterCard, and others, who have collectively invested over $740 million in the company. The latest valuation of the company stood at over $7 billion.
As of February 2023, Razorpay has achieved an annualised total payment volume (TPV) of approximately $150 billion, with a TPV of $90 million in 2022.
“We anticipate a modest growth rate of 35-40 percent in the next fiscal year, and with the ability to onboard new merchants, we expect to witness further growth in the Razorpay payment gateway,” Mathur remarked.
In December, Razorpay secured the final authorization from the Reserve Bank of India (RBI) to operate as Payment Aggregators (PA) and resume onboarding new merchants on its platform after nearly two years.
While the payment business is already profitable, Razorpay aims to achieve profitability in all its non-payment businesses as well before proceeding with the IPO. “The payment business is already profitable, but around 35-40 percent of our revenues also come from non-payment businesses. Therefore, we aim to ensure profitability across all segments before pursuing an IPO,” Mathur emphasized.
Razorpay recently unveiled several new products, including Payment Gateway 3.0 featuring Trusted Badge, Coupon Codes, COD fraud protection, and quick buy technology, during its annual Razorpay FTX event held in Bengaluru on February 23. Additionally, the company introduced an AI assistant tool named Ray, designed to assist customers with queries related to payments, payouts, vendor payments, and more.
