KKR in talks to invest in fintech firm Razorpay

The buyout fund is also likely to invest in the company’s primary funding round alongside the other investors, four people with knowledge of the development said, requesting anonymity.

KKR Digital, set up to scout for opportunities in digital businesses, will lead the round, one of the four people said.

“The company is looking to raise a $125 million round at a valuation of around $7.8 billion (last transaction value in December 2021),” the person added, requesting anonymity.

Of the $125 million, about $60-70 million will go toward buying out shares from some early stage investors like Y Combinator, the second person said.

“Existing investors are also likely to participate in the round which will help the company mop up funds to execute its inorganic growth plans,” he added.

Spokespeople for Razorpay and KKR did not respond to email requests.

In May, venture capital firm Lightspeed Venture Partners, along with Moore Strategic Ventures, invested $75 million in a secondary transaction. In December 2021, Razorpay said it raised $375 million in its Series F funding round led by Lone Pine Capital, Alkeon Capital and TCV. This round valued the company at a pre-money value of around $7.5 billion. The company has so far raised over $740 million from investors such as Tiger Global, Sequoia Capital India and GIC.

Founded in 2014 by Harshil Mathur and Shashank Kumar, Razorpay provides payment gateway services to businesses and e-commerce platforms.

The company also operates a new banking platform that offers credit cards and working capital to companies. Last year, the company said it processed $60 billion in transactions. It competes with online payment gateways such as BillDesk, Cashfree and PayU.

“The new funding round is at a flat valuation, which in itself is commendable given the nature of the larger funding environment,” the third person said.

Last month, Razorpay acquired payment-linked loyalty and engagement solutions PoshVine for an undisclosed sum, marking its fourth acquisition of 2022 and seventh overall.

In an interview, the company’s CEO Harshil Mathur said it would continue to make small acquisitions. Earlier this year, it acquired Ezetap in a $200 million deal. KKR is trying to increase its stake in the high-growth digital businesses in India to diversify its investments. It recently took a small stake in eyewear retailer Lenskart.

The digital team at KKR is pursuing several deals across consumer, fintech and health technology, said the fourth person with knowledge of the firm’s plans.