Razorpay – Episode 1

What do you understand by the term ‘Fintech’?

Intuitively, Fintech (Financial technology) comes across as Fin powered with Tech. Well, that’s true. Fintech is an industry that uses technology in finance to improve and automate the delivery and use of financial services. A revolution to democratize financial services.

A leading fintech startup that emerged back in 2013 was Razorpay. Though the current pandemic has been a massive dread for all of us, it accelerated the journey of Razorpay, making it one of the startups in 2020 to join the coveted Unicorn Club. 

How did Razorpay carve out its way? How did the co-founders stumble upon the idea? What did they do to stand out among competitors?

In this series of Decoding Startups, we will discuss some of these prominent questions and how the co-founders Harshil Mathur and Shashank Kumar went ahead to build an amazing product, ‘Razorpay.’

Razorpay – Episode 1

The story started when both Harshil and Shashank, IIT Roorkee alumni, were working on a side project of building a crowdfunding platform. They, then realized that there were a lot of difficulties faced by Small Medium Enterprises(SMEs) and Startups in accepting online payments.

Startups and SMEs needed an easy way to integrate payment gateway platforms in their online business. The existing payment gateways required a lot of paperwork and were quite expensive, a privilege only available to big companies.

Before proceeding, it is imperative to understand the role of a payment gateway in facilitating online payments.

Payment Gateway is just like a cash counter – except the fact that instead of cash payment, it facilitates online payments through modes like debit cards, credit cards, UPI, and other wallets available these days.

Crossing the bridge

Banking and in specific payments is a highly regulated and compliance-driven market. Most of the existing products in this industry was built by finance, investment, or banking guys. Venturing into the fintech industry with no finance background in a Tier-II city like Jaipur was not an easy exercise.  But the co-founders knew that digital payments in India are set to grow in coming times, so with the knack for solving payments problems for SMEs and Startups, they started building Razorpay.

Now the first step was to onboard a bank as a partner to facilitate online payments. They knocked on the door of every other bank in Jaipur, but no bank appreciated their idea.

Moment of Perseverance: The co-founder, Harshil Mathur, stated that they visited almost 80-100 banks, and none of them were ready to onboard Razorpay as a payment gateway.

But they were adamant enough not to give up.

They changed their strategy. Since Jaipur was a small city, they thought to give it a try in Tier I cities like Delhi and Mumbai, where people are more receptive to startups.

Finally, one fine day, they came across a guy in HDFC who was ready to onboard them. (Kehte hain ki, agar kisi cheez ko dil se chaaho, toh puri kayanat usey tumse milane ki koshish mein lag jaati hai:P)

The Y-Factor

The day Razorpay was launched, 300+ businesses signed up on their platform. Not to wonder that in 2015, Razorpay got selected for Y Combinator, which further bolstered their idea and helped them gain global recognition.

Product-Vision

During their initial phases, they clearly defined their target segments and focused on building a Payment Gateway for SMEs and Startups. Though it’s hard to believe, they denied serving Flipkart in the initial phase, only because they knew that’s not the segment they were looking to cater to. Imagine if they hadn’t done it, their destiny would have been tied with Flipkart. The company would have ended up as Flipkart’s tail, becoming an outsource store for them and would have lost its essence.

Designing a product vision for a company gives a reason for the existence of the product. It conveys purpose and tells the story of the company. It is not just for the customers; it is for the employees too. It serves as a motivator and a metric when making big and small decisions for the company.

But did they stop with just small players?

If yes, how come Airtel, Swiggy are their clients?

As we all know, change is the only constant, and the one thing the co-founders always strived for is to keep innovating and evolving. How did they do it? We’ll cover all these in the next episode.

Until then, stay tuned!😊

Writer: Komal Kumari, Nikita Aggarwal

If  Startup stories excite you, do read our other episodes on Udaan and Dream11. 

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You can write to us at decodingsuccessfulstartups@gmail.com.