Razorpay to shift domicile to India, eyes IPO in two years

Fintech major Razorpay aims to turn profitable across all its business verticals in the next two years, after which the company plans to consider listing on the bourses, said co-founder and chief executive Harshil Mathur.

“We are looking to scale and become profitable on all our business fronts. We give ourselves two years to get to that scale before we can go public. Our online payments business is break-even,” Mathur told businessline.

Razorpay is not just focusing on profits for the IPO, but it would also be a key part of the company’s plans in the long run. Currently the company’s payment business is profitable, the fintech company also has a non-payment business where it is trying to reduce the losses.

Razorpay’s online business contributes around 70 per cent to its overall revenues, and has reached the breakeven point.

The Bengaluru-based company is planning for a domestic public listing in India and is on track to shift its domicile back to India by FY25. He added that the company has submitted the required documents and is awaiting different approvals from regulators in the US and India.

The company reported a 60 per cent growth in its point of sale devices business in FY23 following the acquisition of Ezetap (Razorpay POS) in 2022. Razorpay POS has seen 40 per cent growth in total payment volume (TPV) from April to October 2023 compared to the corresponding period of the previous year.

The company is currently processing $150 billion worth of payment value across its payment products on an annualised basis.

New launches

Meanwhile, the digital payments firm is continuing to launch new products around online payments and tapping into the offline payment market.

In December, the Reserve Bank of India (RBI) lifted a ban on Razorpay from onboarding newer merchants for its payment aggrergator business. The company has onboarded 10,000 merchants post it.

Razorpay has announced new products targeting D2C brands, ecommerce marketplaces, small online and offline merchants as well as large enterprises.

The company’s new payment gateway - Razorpay Payments Gateway 3.0- an AI-enabled payments service for customers which the company claims reduces instances of financial fraud during online transactions, and expedites the payments process, while improving retention for its customers.

The Bengaluru-based payments company is also offering trust badges to certain merchants on the basis of the checkout experiences offered to customers. This should ensure that customers do not abandon carts if they are apprehensive of fraud or other mismanagement.

The new PG offering will also be integrated with its Ezetap point-of-sale (PoS) offerings allowing online shoppers to discover nearby offline stores where they can try products and make purchases.

On offline payments, it launched a new dynamic quick-response (QR) code and contactless tap card payments product through which the company is targeting larger enterprises like retail chains, and other enterprises with an UPI-first interface.

The company is also marking its foray into the loyalty and rewards management space with the launch of its marketing stack, Razorpay Engage HQ. Through Engage HQ, the company has built on its 2022 acquisition of Poshvine and is looking to help brands offer personalised offers to customers across online and in-store.

The fintech firm has also partnered with tech giant Google and Open AI for its payments and payroll business. The company launched RAY which it claims to be India’s first AI assistant for payments, payouts, payroll, vendor payments verticals.

Razorpay has raised $741.5 million till date. It last raised $375 million in December 2021 in a funding round co-led by Lone Pine Capital, Alkeon Capital and TCV, valuing the startup at $7.5 billion.

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