Tiger Global-backed Razorpay reports jump in FY19 cash burn but narrows losses

Tiger Global-backed Razorpay reports jump in FY19 cash burn but narrows losses
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Razorpay Software, a Bengaluru-based payment solutions startup, significantly narrowed its losses for the financial year ended March 31, 2019, on the back of robust growth in revenues and despite an increase in its cash burn.

The company, which styles itself as an online banking platform, reported net losses of Rs 3.3 crore in FY19 against Rs 12.8 crore a year ago, regulatory filings showed. Razorpay also transferred an amount exactly equal to its losses to its general reserves, taking its total reserves to Rs 118 crore. 

Expenses during FY19 grew 110% to Rs 202 crore, a tad higher than its topline, resulting in the company reporting losses. Although employee costs rose more than two times to Rs 51 crore, miscellaneous expenses grew to Rs 129 crore against Rs 64 crore in the previous year. It did not provide a further break-up of the miscellaneous expenses.  

Razorpay’s revenues grew 114% to Rs 193 crore led by strong uptick in digital payments and banking operations. The company’s software development revenue, which it provides to its parent Razorpay Inc, rose 138% to Rs 50 crore and other services, which it classifies as domestic revenue from core business, grew over two times to Rs 142 crore.  

Razorpay has a string of product lines such as Route, which provides an efficient end-to-end solution for businesses to manage marketplaces, split payments, and facilitate vendor payouts; Smart Collect to automate NEFT, RTGS, IMPS payments, subscriptions for businesses with recurring billing models, invoices and links. Razorpay X, which is expected to grow fourfold in terms of volumes, allows for the opening of current accounts along with associated banking operations.

The payments business constitutes 70% of Razorpay’s revenue and the neo-banking platform, Razorpay X, along with Razorpay Capital accounts for the remainder. 

As per statement issued by Razorpay in October 2019, India saw a 383% growth in digital payments from FY18 to FY19.

Founded by IIT Roorkee alumni Shashank Kumar and Harshil Mathur in 2014, Razorpay enables payment solutions for Indian businesses. It counts Tiger Global Management, Matrix Partners India, Y Combinator, Sequoia Capital India, Ribbit Capital and MasterCard as investors.

Recently, One97 Communications, the parent company of Paytm, widened its losses to Rs 3,960 crore against Rs 1,491 crore as its revenues marginally while its expenses jumped 54%.

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