Jaipur based RazorPay becomes the second India focused startup to be selected for YCombinator
Razorpay aims to revolutionize online payments by providing a simple, affordable and secure way for small businesses, startups and other traditional SME organisations like schools, colleges and training centres to start accepting online payments. They are the only India-focused company to be selected by YCombinator this year. Founded by alumni of IIT Roorkee, based and mentored out of the Startup Oasis in Jaipur, Razorpay is the second India-focussed company to have made it to the YCombinator program after Cleartax, which made it to Ycombinator last year. As a part of the YCombinator, they will receive funding of USD 120,000 in addition to 3-month acceleration support and mentoring from Silicon Valley investors and mentors.
Razorpay was founded by Shashank Kumar and Harshil Mathur who quit their jobs at Microsoft and Schlumberger respectively to startup from Jaipur, with support from Startup Oasis – an incubator set-up recently by Rajasthan Industrial Investment Corporation (RIICO) and IIM Ahmedabad’s Centre for Innovation Incubation and Entrepreneurship (CIIE).
The team found that existing US-based payment systems are unsuitable for companies who wish to accept payments in India, which is a very different market compared to western countries when it comes to credit card penetration, 2-step authentication requirements, multiple local payment options and strict regulations.
Currently the on-boarding process of a payment gateway in India involves sending in lots of documents, weeks or months of waiting, and having past operational records. This makes it very difficult for companies (especially startups) to accept online payments. Additionally, technical implementation is very cumbersome, the failure rate of payments is extremely high and the pricing available lacks transparency.
Razorpay is available to all companies registered in India that want to accept payments. Users can signup and integrate their APIs and tools. Once document verification is complete users can start accepting payments immediately. The entire process is completely online.
Shashank and Harshil had intially started building a crowdfunding portal for India but quickly realised the poor state of the online payment industry in India and decided to shift their focus on solving that problem. “We realised that most online payment gateway solutions were extremely cumbersome to get started on, especially for startups and SMEs. When we contacted a few payment gateway companies, we were asked for our past operational records, presence of physical offices, security deposits and very high set-up fees. The online reviews of most payment gateways in India confirmed similar bad experiences. And thus the idea of Razorpay got seeded”, said Harshil Mathur.“We decided to ourselves build a startup-friendly and easy to integrate and use online payment gateway. After doing some initial market surveys to verify the feasibility of the idea and getting a very positive response from potential customers, both of us left our jobs and started working full time on the Razorpay idea”, Shashank added.
The team wanted to operate from a city with low cost structure without compromising on the quality of support services and manpower. Jaipur seemed like a good choice to them as it had all the positives and facilities of a metro city, and at the same time was cost effective and well connected to Delhi / NCR by rail and road. Many startups based out of Startup Oasis become their early adopters.
"Startup Oasis in Jaipur enabled us to come up to speed fast providing access to our first customers, service providers, experienced mentors, potential business partners and investors”, said Harshil.
“RazorPay is a great validation of our hypothesis that global-quality startups can be built out of tier-2 cities in India. During the last year, we at RIICO and CIIE have been working together in the trenches trying to lay foundation of a vibrant local entrepreneurial ecosystem in Rajasthan which we hope to grow further in the coming year”, added Chintan Bakshi, Chief Operating Officer of Startup Oasis.