Exclusive: Razorpay set to be unicorn with up to $150 Mn round led by GIC

Business-focused payment gateway and neo banking platform Razorpay is in advanced talks with Singapore’s GIC and existing investors to raise up to $120-150 million in a fresh round, said three sources aware of the details of the transaction.

This would be the maiden round for the Bengaluru-based company in 2020. It raised $75 million led by Ribbit Capital in June last year. “Singapore government-owned GIC would lead the financing round at a valuation over $1 billion,” said one of the sources on condition of anonymity. “The size of the round mix of primary and secondary capital would be in the range of $120 to $150 million.”

Sources emphasised that the company’s neo banking platform RazorpayX has been positioned as an anchor pitch for the fresh fundraise. Launched almost a year ago, RazorpayX Neo Banking works with over 5,000 merchants. It offers several products such as banking, payroll and vendor management, payout links and loan requirements.

“The contours of the transactions have been finalised. Sequoia and Ribbit will participate in the round with some early backers including angels set to exit,” said the second source. The person requested anonymity as talks are private. 

It’s worth noting that 33 angels invested in its Series A round that was led by Matrix and Tiger Global in 2015. Entrackr couldn’t ascertain the names of investors to receive an exit and the size of the secondary transaction.

The company won't comment on rumours said a Razorpay's spokesperson while Sequoia declined to comment. Queries sent to GIC and Matrix didn’t elicit any immediate response. We will update the story as and when they respond.

Razorpay would be the fourth unicorn in the overall payments space in India after Paytm, Billdesk and Pine Labs. Importantly, it would be the first unicorn from the neo banking space. The company’s valuation will jump over 2.2X in the new round. ET had pegged its valuation in the range of $450 million in Series C round.

Razorpay competes with Open that had raised a $30 million Series B round co-led by Tiger Global and Tanglin Venture Partners in June last year.

While Razorpay has been trying hard to procure an NBFC licence, it recently launched a collateral-free credit line ‘Cash Advance’ for businesses through third-party lenders. It offers loans in the range of Rs 50,000 to Rs 10 lakh without any paperwork. It aims to disburse a total credit worth Rs 100 crore by the end of this year.

Razorpay is yet to file its financial performance for FY20. However, the company had improved its financial health in FY19. The company was close to break-even with a 2.14X growth in operating revenue while losses shrunk by 74.5%. It had a revenue of Rs 193 crore at a loss of Rs 3 crore in the year ending March 2019.