Razorpay, now valued at an impressive $7.5 billion, stands as a testament to entrepreneurial resilience. Co-founder and CEO Harshil Mathur recently shared the challenging early days of the company, revealing that he and co-founder Shashank Kumar were rejected by almost 100 banks before achieving their breakthrough.
From High-Paying Job to Startup Dream
Mathur's path to fintech entrepreneurship was not straightforward. A mechanical engineer by training, he initially secured a coveted position at Schlumberger in Abu Dhabi, complete with a six-figure salary and luxurious perks. However, the corporate environment quickly proved unfulfilling. Mathur, who preferred coding, soon realized the field was not for him and chose to leave the secure, high-paying job in pursuit of his passion.
Identifying a Critical Market Gap
During his time offshore, Mathur collaborated with college friend Shashank Kumar on various side projects. It was while developing a crowdfunding platform that they encountered a significant hurdle: integrating online payments. What they expected to be the easiest part of their project turned out to be the most complex.
Further investigation, through discussions with startup founders in Bengaluru and Pune, confirmed their suspicions. Many founders struggled with setting up digital payments, some even resorting to cash transactions due to the complexity. This widespread frustration highlighted a massive, unmet need in the market, sparking the idea for Razorpay.
The Gauntlet of 100 Bank Rejections
Determined to build their own payment gateway solution, Mathur and Kumar embarked on a challenging journey to secure banking partnerships. They approached numerous banks, visiting branches and reaching out to executives via LinkedIn, pitching their vision repeatedly. The response was overwhelmingly negative.
"I would have met and mostly been rejected by almost 100 bankers in that three-to-six-month period," Mathur recounted.
Instead of capitulating, the duo viewed each rejection as a learning opportunity. Each conversation, despite ending in a 'no,' provided valuable insights into the intricacies of the payments ecosystem and what their nascent company was lacking.
A Merchant-First Philosophy
Unlike established payment companies that catered primarily to banks and large enterprises, Razorpay adopted a novel approach: designing its platform with startups and small merchants at its core. Lacking traditional banking experience, Mathur and Kumar focused on building a product that directly addressed customer pain points.
"We built our product from the merchant's perspective, not the bank's," Mathur explained. They collaborated closely with startups in co-working spaces, using real-time feedback to refine the platform, aiming to improve payment success rates and streamline transactions for businesses of all sizes.
Y Combinator and Global Recognition
Razorpay's fortunes shifted significantly after its acceptance into Y Combinator, a prestigious startup accelerator, even before securing all necessary bank approvals. This pivotal moment exposed the founders to international product development standards and connected them with investors who believed in their vision. Today, Razorpay stands as a leading fintech company in India, a testament to the power of persistence, continuous learning, and an unwavering commitment to solving real-world problems despite initial setbacks.