Tiger-backed Razorpay eyes group profit, expands to Singapore
(Bloomberg) – Indian fintech firm Razorpay Software has earmarked group profitability as a key milestone on the road to a stock market listing, which it intends to stage within the next three years.
The Tiger Global Management-backed company is focused on becoming profitable on a consolidated basis across all business verticals, said Shashank Kumar, co-founder and managing director of Razorpay in an interview with Bloomberg News. 'We're 2-3 years away from IPO,' he added. While its core payments segment is already profitable, Razorpay remains loss-making at the group level, with its neo-banking and lending services yet to break even.
Billion-dollar, private technology startups – so-called unicorns – face a reckoning amid a slowing IPO market and a souring fundraising market. Many are shifting their near-term focus to profitability.
Bengaluru-based Razorpay, last valued at $7.5 billion in a 2021 funding round co-led by Lone Pine Capital, Alkeon Capital Management and TCV, saw net income jump 360% to 340 million rupees ($4 million) for the fiscal year ended March 31, 2024, helped by its mainstay payment gateway operations.
As part of plans to boost revenues, the company is expanding into other countries. It launched in Singapore on March 7 and over the next few years will also explore rollouts in Thailand, Vietnam, the Philippines and the Middle East.
Razorpay wants to tap into Singapore's e-commerce market, which is expected to reach $40 billion in the next three years, Kumar said.
More broadly, e-commerce payments in Southeast Asia are expected to more than double from 2022 to $273.3 billion by 2027, according to a 2023 report by IDC. Razorpay aims to capture $5 billion in total payment volume from the region, with real-time payments in Singapore and cross-border payments two focal points.
Its plans follow the 2024 unveiling of Project Nexus, a Bank for International Settlements Innovation Hub project facilitating connections between the instant payment rails of Singapore, India, Malaysia, the Philippines and Thailand to facilitate low-cost cross-border payments.
Razorpay has raised $741.5 million to date from backers including Singapore sovereign wealth fund GIC, Tiger Global, Peak XV, Salesforce Ventures and Y Combinator, it said in a statement.
More stories like this are available on bloomberg.com
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