Startup Deep Dive : Razorpay — revenue jumped 65% and it still posted a Rs 1,209 crore loss

In its latest reported fiscal year, Razorpay’s revenue jumped 65% to Rs 3,783 crore (about $394 million at Rs 96 to the dollar) — and the company still closed the year with a net loss of Rs 1,209 crore, according to its own filings reported by Entrackr in October 2025. The contradiction is not what it looks like: strip out one-time ESOP charges and the tax bill from moving its parent company from the United States to India, and the core payments business was EBITDA-positive for the year.

That single fact — a fast-growing, fee-earning fintech reporting a loss on paper while preparing a stock market listing — is the thread running through Razorpay’s story: a payments company that has spent eleven years alternating between rapid growth and regulatory near-misses, now trying to convince public-market investors that the loss on its income statement is not the same thing as a broken business.

Quick facts

What they do

Razorpay sells the plumbing that lets an Indian business accept and move money online. Its core product is a payment gateway: a piece of checkout software that a website or app plugs in once, after which it can accept UPI, credit and debit cards, net banking, wallets and buy-now-pay-later, without separately negotiating with every bank and card network. On top of that sits RazorpayX, a business banking layer that gives companies current accounts, payroll and vendor payouts and automated tax payments, and Razorpay Capital, which arranges working-capital loans and corporate cards for the same merchants using their transaction history as underwriting data. The customers range from solo creators and small retailers to large enterprises; the pitch to all of them is the same — one dashboard for money coming in and going out, instead of a different login for every bank and payment rail.

The origin

Harshil Mathur and Shashank Kumar met at IIT Roorkee. Mathur went on to work as a wireline field engineer at Schlumberger and Kumar as a software engineer, before the two teamed up on a crowdfunding website as a side project. Building that site exposed the actual problem: accepting an online payment in India in 2014 meant weeks of paperwork with a bank, a clunky checkout page that scared customers away mid-transaction, and no single technical integration that worked across UPI, cards and net banking. That gap between how simple payments felt to a consumer and how hard they were to build for a merchant was the founding insight. They started Razorpay in December 2014 and were accepted into Y Combinator’s Winter 2015 batch, one of only two India-focused startups in that cohort — a credential that mattered more than the capital, because it opened doors at banks that had, by the founders’ own widely reported account, turned them down roughly a hundred times before that.

The struggle years

Razorpay’s hardest stretches were not about running out of money; they were about running out of regulatory permission. The clearest instance: in December 2022 the Reserve Bank of India ordered Razorpay, Cashfree and several other payment aggregators holding only “in-principle” approval to stop onboarding new merchants until they filed further audit and compliance documentation, as reported by Business Standard at the time. For a company whose entire business model depends on adding new merchants, an onboarding freeze is close to an existential threat. The freeze lasted roughly a year; the Reserve Bank of India granted Razorpay final Payment Aggregator authorisation and lifted the embargo only in December 2023, according to YourStory’s contemporaneous reporting. Separately, the company’s own financial filings show a quieter struggle: revenue climbed 54% in FY23 to Rs 2,279 crore, yet profit stayed almost flat at Rs 7.2 crore against Rs 7.3 crore the year before, as Entrackr reported from Razorpay’s filings in February 2024 — a year in which rising employee costs and operating expenses ate up nearly every rupee of additional revenue.

The turning point

The Reserve Bank of India’s payment aggregator freeze is also the clearest before-and-after moment in Razorpay’s history, because both sides of it come with numbers. Before: a licence freeze that blocked new merchant onboarding for about twelve months, from December 2022 to December 2023, at a company whose growth engine is merchant acquisition. After: with authorisation restored, Razorpay’s payment gateway business crossed Rs 2,000 crore in revenue in FY24 and profit after tax jumped nearly five-fold to about Rs 34 crore from roughly Rs 7 crore the previous year, according to Entrackr’s and Inc42’s reporting on the FY24 filings published in October 2024. The freeze forced Razorpay to spend a lost year tightening compliance and audit processes instead of adding customers; the resumption converted that operational readiness into the sharpest profit jump in the company’s disclosed history, before the reverse-flip costs of FY25 reset the picture again.

The money behind it

Razorpay has raised more than $740 million in total funding since 2014, according to TechCrunch’s reporting on the company’s December 2021 Series F round. Y Combinator’s Winter 2015 batch was the first real capital and credibility the founders received, after a long run of rejections elsewhere. Tiger Global and Sequoia Capital India (rebranded Peak XV Partners in 2023) came in during the company’s earlier growth rounds and stayed on through every subsequent raise, providing the kind of repeat, growth-stage capital that let Razorpay scale without going back to the market every few months. GIC, Singapore’s sovereign wealth fund, joined as a later-stage investor bringing the balance-sheet depth associated with pre-IPO companies. The December 2021 Series F — $375 million co-led by Lone Pine Capital, Alkeon Capital and TCV, with Tiger Global, Sequoia Capital India, GIC and Y Combinator also participating — pushed Razorpay’s valuation to $7.5 billion, up from $3 billion just eight months earlier, as reported by both TechCrunch and Bloomberg in December 2021. That remains the last valuation set by an actual funding round; by the time Razorpay filed confidential IPO papers with Sebi in June 2026, market reports from Entrackr and other outlets put the likely listing valuation at roughly Rs 50,000-60,000 crore, or about $5.2-6.3 billion — a marked-down number that reflects how much investor appetite for growth-stage fintech has cooled since the 2021 peak, rather than any single new event at the company.

How it makes money

Razorpay is, at its core, a fee business. Per the company’s own published pricing, most domestic card and other non-UPI transactions carry an all-in fee of about 2% plus tax, deducted before the merchant is settled; premium cards, EMI and international card payments are priced higher, around 3% plus tax; and international bank transfers carry a separate rate near 1% plus tax. The part people routinely get wrong is UPI: the Reserve Bank of India has set UPI’s merchant discount rate at zero by law, so the roughly 2% fee that larger merchants sometimes see on UPI transactions is not a payment charge at all — it is Razorpay’s own platform fee for the checkout software, fraud checks, reconciliation dashboards and settlement infrastructure sitting on top of a free rail. On the cost side, Razorpay must pay interchange and network costs on cards, settle funds within regulatory timelines, and absorb fraud and chargeback losses, which is why its margin sits in the spread between what it charges merchants and what it pays banks and card networks — a spread that narrows automatically for high-volume merchants who negotiate lower tiered pricing. RazorpayX and Razorpay Capital add a second, smaller revenue layer: banking-as-a-service fees and a share of interest or origination income on loans arranged through partner banks and non-banking finance companies, without Razorpay itself carrying the credit risk on its own balance sheet.

The numbers

The FY23 and FY24 figures come from Entrackr’s reporting on Razorpay’s Ministry of Corporate Affairs filings (February 2024 and October 2024); the FY24 base figure used above matches the year-on-year comparison Entrackr itself used in its October 2025 report on FY25. A narrower Entrackr report from October 2024 measured the flagship payment-gateway entity’s own operating revenue at Rs 2,068 crore for FY24, up 24% — a reminder that Razorpay files as more than one legal entity, so different reports can legitimately use slightly different consolidation boundaries. What is consistent across every source: revenue nearly doubled from FY23 to FY25, while the bottom line swung from a small profit to a large loss, entirely because of the ESOP expense and reverse-flip tax charges booked in FY25 rather than any deterioration in the underlying payments business, which Entrackr’s October 2025 report describes as EBITDA-positive for the year.

Where the money comes from

Entrackr’s October 2025 coverage of the FY25 filings attributes Razorpay’s revenue growth to “solid execution across its payment gateway, banking, POS, and international businesses,” naming Malaysia and Singapore as the company’s active overseas expansion markets. That phrasing matters: Razorpay is no longer just a domestic payment gateway. The same period saw it take a majority stake valued at about $30 million in UPI-focused fintech POP, and it separately secured a cross-border payment aggregator licence from the Reserve Bank of India, according to Entrackr’s June 2026 reporting on the company’s IPO filing — both moves aimed at merchants who sell to customers outside India, or receive payments from them. The surprise for anyone who thinks of Razorpay as purely a UPI checkout button: a meaningful and growing share of its newer revenue is coming from business banking, point-of-sale hardware for offline merchants, and cross-border payment flows, categories that did not exist in the company’s revenue mix a decade ago and that carry different, generally thicker, margins than a plain online card or UPI transaction.

The risks

Three risks stand out, and none of them is hypothetical. First, regulatory dependency: Razorpay’s entire onboarding pipeline can be switched off by a single Reserve Bank of India order, exactly as happened between December 2022 and December 2023; a repeat of that freeze closer to or after listing would land on a public stock price in real time. Second, the accounting risk of one-off charges recurring: the FY25 net loss of Rs 1,209 crore was driven by ESOP expenses and reverse-flip tax costs that Razorpay and Entrackr both describe as largely non-recurring, but the reverse-flip process itself is not fully closed — Inc42 has reported an Indian tax liability of roughly Rs 1,245 crore alongside a separately estimated US tax liability in the $250-300 million range, and any further cost overruns on that redomiciling would again depress reported profit even if the payments business itself is healthy. Third, valuation reset risk: multiple outlets reporting on the confidential Sebi filing in 2026 point to a listing valuation of roughly $5-6 billion, well below the $7.5 billion Razorpay commanded in its last private round in December 2021, meaning existing investors and ESOP-holding employees may realise a lower return than the company’s own past fundraising headlines implied.

The takeaway

The transferable lesson from Razorpay is not “payments companies are lucrative,” though the fee model helps. It is that an infrastructure business built on top of a regulator’s rails will have its growth curve interrupted, sometimes for a full year, by decisions it does not control — and the difference between the companies that survive that interruption and the ones that do not is whether they used the enforced pause to fix the compliance and audit gaps the regulator flagged, rather than treating the freeze as bad luck to wait out. Razorpay’s sharpest profit jump on record came in the twelve months immediately after its onboarding ban was lifted, not before it.

Frequently asked questions

What does Razorpay do?

Razorpay provides a payment gateway that lets Indian businesses accept UPI, card, net banking and wallet payments online, alongside RazorpayX for business banking and Razorpay Capital for merchant lending arranged through partner banks and non-banking finance companies.

Who founded Razorpay, and when?

Harshil Mathur and Shashank Kumar, both IIT Roorkee alumni, founded Razorpay in December 2014 in Bengaluru and were accepted into Y Combinator’s Winter 2015 batch.

Is Razorpay profitable?

It has been inconsistent. Razorpay posted small profits in FY22, FY23 and FY24 (around Rs 7 crore, Rs 7.2 crore and Rs 34 crore respectively), then a net loss of Rs 1,209 crore in FY25, which Entrackr’s October 2025 reporting attributes mainly to ESOP charges and reverse-flip tax costs rather than a decline in its core payments business.

What is Razorpay’s valuation, and is it planning an IPO?

Razorpay was last valued at $7.5 billion in a December 2021 funding round, per TechCrunch and Bloomberg. It filed confidential draft IPO papers with Sebi in June 2026, and multiple reports peg the likely listing valuation at roughly $5-6 billion, a reset from its 2021 peak.

Why did Razorpay move its parent company from the US to India?

To list on Indian stock exchanges, Razorpay needed its holding structure based in India rather than the US. It completed this “reverse flip” in 2025, a move Inc42 reported would cost roughly Rs 1,245 crore in Indian taxes alongside a separate US tax liability, as part of preparing for its Indian IPO.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• TechCrunch, “Indian fintech giant Razorpay valued at $7.5 billion in $375 million funding,” December 2021
• Bloomberg, “Razorpay Surges to $7.5 Billion Valuation in Latest Fundraising,” December 2021
• BusinessToday, “Razorpay’s valuation soars to $7.5 bn with a fresh $375 mn fundraise,” December 2021
• Entrackr, “Razorpay posts Rs 2,279 Cr revenue in FY23; bottom line remains stagnant,” February 2024
• Entrackr, “Razorpay payment gateway biz crosses Rs 2,000 Cr revenue in FY24, PAT soars 5X,” October 2024
• Inc42, “Razorpay’s FY24 Profit Jumps 4.5X To INR 34 Cr,” October 2024
• Entrackr, “Razorpay revenue soars 65% in FY25; gross profit crosses Rs 1,200 Cr,” October 2025
• Entrackr, “Razorpay confidentially files DRHP with SEBI for IPO,” June 2026
• Business Standard, “RBI asks Razorpay, Cashfree to temporarily stop onboarding of new customers,” December 2022
• YourStory, “RBI lifts embargo for Razorpay, Cashfree to operate as payment aggregators,” December 2023
• Inc42, “Razorpay To Pay INR 1,245 Cr In Taxes For Domicile Shift To India,” 2025
• Indian Startup News, “Razorpay completes reverse flip from US to India; founder says, ‘Dream to build for India’,” May 2025
• Razorpay company blog, “Razorpay Payment Gateway Pricing and Fees Explained,” 2026
• Y Combinator, company profile for Razorpay (ycombinator.com/companies/razorpay)
• Trading Economics, USD/INR exchange rate, September 2026

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