Online payment start-up Razorpay raises $120,000 from YCombinator

Razorpay, online payment start-up and the second India-focussed company to have made it to the YCombinator programme has received funding of $120,000 in addition to 3-month acceleration support and mentoring from Silicon Valley investors and mentors.

Founded by alumni of IIT Roorkee, Razorpay is based out of the Startup Oasis in Jaipur which aims to revolutionise 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.

Razorpay was founded by Shashank Kumar and Harshil Mathur who quit their jobs at Microsoft and Schlumberger respectively to startup from Jaipur. 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.

Shashank and Harshil had initially 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.

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 start-ups) to accept online payments.

The company claimed that Razorpay is available to all companies registered in India that want to accept payments. Users can sign up and integrate their APIs and tools. Once document verification is complete, users can start accepting payments immediately. The entire process is completely online.

"We realised that most online payment gateway solutions were extremely cumbersome to get started on, especially for start-ups 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.