The Bengaluru-based digital payment startup, Razorpay, announced that it has raised $20 million in its Series B funding round. The round was led by Tiger Global and Y Combinator and also saw participation from Matrix Partners.

In 2016, the company had raised $11.5 million in a Series A funding from existing investors along with 33 angel investors including founders of Snapdeal, InMobi, and FreeCharge. In the same year, the company also received an undisclosed strategic investment from the American payments and financial services company, MasterCard. The current influx of funds brings the company’s total funding raised till date to $31.5 million.

The startup was founded in 2014 by Harshil Mathur and Shashank Kumar, both of whom are IIT Roorkee Alumni. The company enables businesses to accept online payments via credit/debit card, net banking and mobile e-wallets made by end customers. In 2015, Razorpay had become the second Indian startup to make it into the US-based Y Combinator’s accelerator programme.

According to the CEO, Harshil Mathur, the startup is focusing on domestic competitors and plans to employ the latest influx of funds to scale up its recently launched services for businesses. In lieu of serving businesses the company had launched new offerings such as payment disbursement, recurring payments, payment collection and invoice management services. These new products are a new revenue channel for the company and are expected to account for 30 per cent of the revenues by the end of the year.

“Stripe and PayPal are likely to focus on global companies serving Indian Markets. We are focused on domestic businesses,” said Harshil Mathur. He went on to add that this is the first time Y Combinator has carried out a follow up funding round in an Indian startup.

The company’s revenues grew by 15x times in 2017 in comparison to the previous year. During the year, the company had expanded its base of 20,000 merchants to 65,000 merchants including GoIbibo , Yatra , Zomato, Zoho, DSP BlackRock and Zerodha. The company is targeting to expand its base to 2 lakh merchants in 2018.

The platform receives the largest volume of transactions from the food tech sector while the largest value of transactions comes from the travel sector. As per the CEO, the company is planning on exploring the lending space, mainly via a marketplace model and is also open for acquisitions in the segment. He also added that the company has been witnessing a month-on-month growth in the 25-30 per cent range, a trend that he hopes will continue. He however declined to comment on the revenue details and valuation of the company post the fund raise.

“The company’s vision and execution over the last 3 years has shown tremendous results, especially for an India focused SAAS company. With the online and digital payment space going through a massive transformation in India, their business is only going to grow further,” said Anu Hariharan, Partner at Y Combinator’s Continuity Fund, in a statement.

(Picture courtesy: assets.entrepreneur.com )