From a 10-member team to a unicorn: How Razorpay navigated through the tough Indian payments ecosystem
In 2014, Harshil Mathur and Shashank Kumar launched Razorpay to make the payment process simple for startups and SMEs. Today, almost all payment gateways have an option of Razorpay as a payments provider.
The Bengaluru-based fintech startup entered the unicorn club amid the coronavirus pandemic in October 2020.
Talking to Sanjay Swamy, Managing Director of Prime Venture Partners, during a recent episode of Prime Knowledge Series podcast, CEO and Co-founder Harshil Mathur shared the journey of Razorpay – its rise from being a small startup to a massive corporation.
How it all started
While building a social crowdfunding platform,where people, in case of a medical emergency, could post a public campaign and raise funds, Harshil and Shashank realised that it was “extremely difficult for Indian startups to accept payments back in 2014.” Most companies used to only focus on existing gateways as they had customers, and that’s what led the founders to come up with the idea of Razorpay.
The customer-first approach
The APIs from the banks were not easily available, hence they decided to take the customer-first approach to build Razorpay.
“Most payment platforms take their APIs from banks. Then, they integrate with banks and build a further layer. Hence, they all look similar. But with Razorpay, we got to build the product first, keeping bank integration as the black box. We discussed what the merchants want and what our customers demand. We answered these and built our product,” says Harshil.
“We made a lot of them”, recalls Harshil.
Conversing with Sanjay Swami, Harshil shared how he had begun hiring the sales team quite early and Y Combinator helped him to re-focus. He also recalled when he landed Flipkart and Ola Cabs as customers for Razorpay at a time they could not handle such mammoth clients.
Harshil admits, “Had we made those mistakes then and did not rectify them immediately, Razorpay would not be here today.”
The importance of building the right team
Building the right team is one of the toughest jobs, states Harshil.
“If you make a strategic mistake in business, you can undo it somehow. But if you build a wrong team, it sets you back real hard,” he elaborates.
The founders started Razorpay with eight to 10 people from the founder’s college circle with whom he had worked. And they were all jack of all trades who did not fit into a single role, revealed Harshil.
“Hiring fast for a single problem does not work. You cannot hire a person for short-term wins and then fire them when they don’t need them. You need to hire for the long-term and work with them closely to allow them to blend in with the company culture – which this is the most important job of any entrepreneur,” he explains.
The difference between serving SMEs and enterprises
From day one, Razorpay realised that SMEs and enterprise customers are two different buckets. The focus was just on SMEs. As customers evolved with time, the company also evolved to cover bigger players.
“Our strategy was to grow along with our customers. We started by landing Series A startups. Once they reached A+, we grew along with them, provided A+ payment features and went looking for other A+ customers. Then, this set reached Series B and C, and we followed them the same way,” says Harshil.
“But for us, one thing stayed true – we are building for the masses. So SMEs take the first priority and it’s a harder call to make. We wanted to build a company to serve a million SME clients. And that is the core direction that Razorpay wants to take,” claims Harshil.
To hear more, listen to the podcast here.
Edited by Kanishk Singh