Fintech startup Razorpay is in talks to raise fresh capital from its existing investors, including venture capital firm Sequoia Capital India. The digital payments platform is eyeing a valuation of $600 million, which is a 50% jump since its previous fundraise as the fintech sector has witnessed a massive growth since the Coronavirus pandemic.
Sequoia Capital India has held talks to co-lead the new fundraising, which is estimated to be around $60-80 million in size, as reported by ET (1).
The Bengaluru-based startup is currently in talks to enlist the new US and Southeast Asian-based investors as the company’s business volume has seen a spike in e-transactions, compared to pre-Corona times.
An individual aware of the discussion, as reported by ET, said,
“Most of the fundraise would be from existing investors, while they are exploring talks with two new investors. Sequoia has offered to at least co-lead the round depending on if new investors join the fundraise.”
Razorpay plans to use the fresh capital, if invested, to scale up its non-payment gateway business.
Spike in business during COVID
The platform aims to on-board over 10k customers by 2021 and has already on-boarded over 5k businesses on its platform. The non-payment gateway business presently contributes to about 30% of total business. While recovery has been fast in digital payments, segments like ecommerce, grocery have seen 150% growth since lockdown started, a person aware of the matter stated.
Sequoia raised its new fund of $1.3 billion last month for accelerating investments in India and Southeast Asia and has also made several investments in the payments sector, including point-of-sales machine maker Pine Labs and MobiKwik.
Earlier, Razorpay also raised over $106 million from investors, including Ribbit Capital, a US-based fintech-focused investor, and Tiger Capital. Over 1 million merchants hailing from different segments make use of Razorpay’s services for their payment needs.