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To be sure, its online payments business which contributes to 75% of its overall topline is currently breakeven and not losing any money.
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“We are at least two years from an IPO… Before that we want other parts of our business to break even and be profitable on all fronts. Our (online) payments business is break-even,” said Mathur.
The move comes at a time when the Bengaluru-based fintech is in the midst of domiciling to India before the end of FY25. As Razorpay looks to move its parent back to India, it is expected to cough up a tax bill of $250 -$300 million in the US, ET first reported citing sources on November 14.
“We have a decent cash reserve. We are able to make up for our day-to-day operations which includes engineering and other functions from the revenue that we bring in… We don’t incur a large amount of burn from operations. The tax impact of shifting is high and we have accounted for it and are still in a decent place where we don’t have to raise money before we go for an IPO,” Mathur said.
Mathur added that the company has submitted the required documents and is awaiting different approvals from various regulators in the US and India.
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Razorpay’s timeline to go public also depends on how smoothly its process to domicile in India goes. The domicile process is expected to put pressure on the fintech’s cash reserves especially at a time when the funding is hard to come by. Razorpay has raised $741.5 million till date. Its last equity fund raise took place in December 2021 when it raised $375 million co-led by Lone Pine Capital, Alkeon Capital and TCV, valuing the startup at $7.5 billion.
“We hope to complete the process (of domiciling to India) before FY25-end,” he concluded.
New launches underway
The digital payments major is continuing to launch new products around online payments and is confident to onboard almost 70% of customers it lost last year, in the next six months.
“Our estimate is that over 70% of the merchants that we have lost last year will come back to the Razorpay platform within six months from now. That’s our effort,” Mathur said.
According to Mathur, Razorpay saw 60,000 – 70,000 new merchant signups for the platform in the first two weeks and onboarded about 10,000 new merchants within a week of enabling onboarding again.
“Our average monthly signups now are 3-times what it used to be, pre-embargo. And we are still continuing to see similar numbers,” added Mathur.
The company is currently processing $150 billion worth of payment value across its payment products on an annualised basis.
As India’s top payment gateways (PGs) went through a year-long embargo on new merchant signups, Razorpay is hoping to hold the topline growth in FY24, Mathur added.
New products
On Friday, Razorpay unveiled its payment gateway 3.0 product, with additional features such as its artificial intelligence stack to reduce the steps in checkout and drive further conversions for online businesses.
Through the revamped PG stack, Razorpay will provide smaller businesses a buyer-protection badge which will help improve customer trust on transacting on these platforms.
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 the products and make a purchase. On offline payments, it launched its new dynamic quick-response (QR) code and contactless tap card payments PoS device.
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 looks to help brands offer personalised offers to customers across online and in-store.
With its new launches, Razorpay is knitting its online and offline payment businesses closely and looking to follow customers across both channels.
With diversification, about 35% of Razorpay’s user base have now opted for one value-added product beyond the PG offering, Mathur said.
