IPO-bound Razorpay to enter four new South-East Asian markets after Malaysia, Singapore

This move comes as the SaaS-based fintech firm is set to go public on Indian stock exchanges in the next 12-18 months.

The company, which entered Southeast Asia for the first time through Malaysia in 2022, continued its regional expansion by launching operations in Singapore earlier this year.

“We are currently in Singapore and Malaysia and plan to launch in three or four more geographies next year,” said Harshil Mathur, co-founder and chief executive officer (CEO) of Razorpay. “We’re looking broadly at Southeast Asia; the Philippines, Thailand and Vietnam are all in the plans. But we’ll wait for licenses in each market before launching.”

Mathur added that Razorpay has applied for licenses in one or two of the upcoming markets, but the process is still in its early stages.

In terms of investments, he stated that the biggest costs of entering any new market are related to obtaining regulatory licenses and establishing local teams. “There is also some R&D (research and development) spend to structure operations for each market. But since we are B2B (business-to-business), we do not have significant marketing costs and most of our engineering operations are run from India, so the real challenge is licensing,” he explained.

Razorpay expects the digital payment ecosystem in South East Asia to witness significant growth, with transaction volumes estimated to exceed $2 trillion by 2030. Mint earlier.

Artificial intelligence and payments

In its online payments business, Razorpay has partnered with National Payments Corp to pilot agency payments on ChatGPT to explore AI-driven commerce on a national scale. of India (NPCI) and OpenAI. “For this, we have partnered with BigBasket and Vodafone as commercial partners,” said Mathur.

On the cross-border side, Razorpay recently launched its import stack, allowing global merchants to accept payments from India. “We started this with Airbnb,” Mathur said. “When an Indian resident books an Airbnb anywhere in the world, the payment goes through us. We are their exclusive partners for all global payments from India.”

This is Razorpay’s play on overseas remittances under its cross-border offerings. He added that the company is working with other international brands to enable similar cross-border payment flows.

For Razorpay, revenue from international markets is currently the fastest growing segment. “All areas are growing, but of course payments remains our largest business. It is growing at around 40% on an annual basis, although its base is large,” Mathur said. he said. “Other parts of our business (offline payments, cross-border, RazorpayX and international) are growing much faster, around 70-90% on an annual basis, because they are smaller segments. Our international operations in Southeast Asia, including (the fastest growing) Malaysia and Singapore, are expanding rapidly.”

Offline focus

Meanwhile, in India, Razorpay is strengthening its offline payment business. “The third big area we have launched is on the airport lounge side,” Mathur said. “All airport lounges are owned by GMR, TFS and Adani; the payment experience is powered by Razorpay and accounts for almost 90% of all lounges in India.”

Founded in 2014 by Shashank Kumar and Harshil Mathur, Razorpay is an Indian-born company based in the USA.

In May this year, Razorpay completed its comeback to India as part of its plan to go public in the next 12-18 months.

The company has raised over $740 million from investors including Tiger Global, Peak XV Partners, Y Combinator, Lone Pine Capital and Alkeon Capital. Total income in 24 Financial Years ₹2,501 crore ₹2,293 crore was generated last year and around 75% of the revenue came from the online payment gateway business. Net profit increased ₹34 crore ₹7 crore a year ago. The company is yet to announce its FY25 financial reports.