Harshil Mathur and shashank Kumar, two young IIT Roorkee alums, shared more than just an apartment in the busy Bengaluru area of Koramangala; they shared a startup idea.

The odds were stacked against the pair when they established Razorpay in 2014.

Even in 2015, many people thought there wasn't enough space for another participant in the saturated payments market.

However, ten years later, Razorpay is on course to reach a $1 trillion milestone, processing $180 billion in payments yearly while leveraging India's rapidly expanding fintech sector.Additionally, the company declared that all of its present employees would receive ESOPs worth one lakh. Today, 80 of India's 100 unicorns rely on the fintech giant to power their payments.

According to its news statement, the company conducted a $75 million ESOP repurchase in 2022, benefiting 650 current and past employees, following its first ESOP buyback in 2018, which allowed 140 employees to sell their vested shares.

"The majority of VCs at the time said no. They thought the payments sector was already saturated, Kumar recalls. Under the direction of vikram Vaidyanathan, Managing director at Matrix, Matrix Partners india placed a wager on Razorpay's idea. "Shashank and Harshil's singular focus on tackling payment failure rates with a technology-first approach set them apart," Vaidyanathan said.

After weeks of follow-ups and video calls—an uncommon procedure in 2015—Matrix decided to invest. "We were in Y Combinator at the time and couldn't fly back to india for a pitch," Kumar explained. "Matrix's adaptability and tenacity were noteworthy. They had faith in us, so it was more than just signing a cheque."Harshil and I were influenced by our middle-class background, which taught us to put doing the right thing ahead of cutting corners. Razorpay was always about creating something significant in the long run, not about quick successes," Kumar continued.

Growth milestones and turning points

Throughout Razorpay's journey, there have been multiple turning points. "In the early days, our mobile-first payment stack and seamless checkout experience helped us onboard startups and SMEs," Kumar said.Then came significant turning points. digital payments were expedited in 2016 by the introduction of UPI and the demonetisation wave. The epidemic then struck, forcing conventional companies to switch to digital. The majority of that growth, from $50 billion to $180 billion in total payment volume, has occurred in the last two years, according to Razorpay Chief Operating Officer Arpit Chug.

"I would say that the last 24 months have likely been the most significant period in the journey from 50 billion to 180 billion. Therefore, the acceleration is just getting stronger," stated Arpit Chug, the company's chief financial officer. "We established a goal of 100 billion when I started working for the company five years ago. Everyone thought, "Oh, 100 billion?" And now, he remembered, we're already at 180.

Vaidyanathan gave Razorpay credit for prioritising its products."For the first five to seven years, every major decision-from hiring to organisational structure-was driven by their focus on technology and product," he stated.

Razorpay's connection with its supporters has been mutually beneficial, in contrast to many businesses where investors actively participate in day-to-day operations. Vaidyanathan explained that Matrix functions more as an accelerator than a driver. "Our job was to provide the right introductions and act as a soundboard for their ideas," he stated.

Kumar went on to say, "As young founders, it was difficult for us to hire senior leaders, but Matrix's network helped. Their affiliation helped us draw in top personnel by lending legitimacy to our mission.

Overcoming Obstacles

When the reserve bank of india (RBI) forced Razorpay to onboard new customers and tightened regulatory oversight of payment aggregators, it was one of the company's toughest tests. "We focused on what we could control," Kumar stated. Strict compliance procedures and revenue stream diversification through the expansion of more recent products, such as offline payment options, were part of this.

"RBI is one of the most progressive regulators globally, but balancing innovation and compliance is always tricky," Vaidyanathan said. Razorpay used the time to improve its products in spite of obstacles, increasing its current volumes by more than 40% in that year.A Look At Razorpay's journey From jaipur To Bengaluru: How It Went From Nothing To $7.5 Billion

The path ahead

With a $1 trillion aim in sight, Razorpay is concentrating on broadening and deepening its platform. The business now provides services to companies through a variety of platforms, including whatsapp commerce and online markets. "Whether it's cross-data-border payments or affordability solutions for high-value transactions, we aim to be the go-to platform for indian businesses," Kumar stated.With more than half a million POS terminals in place, Razorpay is also making significant investments in offline payments. "The future lies in omnichannel commerce. We're making sure companies can move between the online and offline worlds with ease," Kumar continued.

Long-term play or exit strategy?

Prior to its intention to list on indian stock exchanges, Razorpay relocated its parent company from the united states to india in May.

Kumar remained hopeful but noncommittal when questioned about a possible IPO or acquisition. "We are constructing for the long haul. Although an initial public offering (IPO) is a normal milestone, our goal is to help businesses solve actual problems. Everything else will come after.

"Great companies focus on creating value," Vaidyanathan continued. Razorpay's journey is still in its early stages. The upcoming ten years will bring about much greater change.

The founders' and investors' collaboration remains the foundation of Razorpay as it moves into its next stage. "We are fortunate to be travelling with them," Vaidyanathan said in closing.