RazorpayX, the business banking arm of payment gateway Razorpay, has announced a foray into a new product line — Forex Service for Startups. The company claims this new service — fully compliant with regulatory requirements — "will empower Indian startups to seamlessly transfer the funds they have raised globally to India".
In a press release, the company said the service enabled over 15 startups, including Virohan, Tortoise, Coupl across edtech, fintech, and financial services sector to bring Rs 350 crore in annualised run rate (ARR) to India in the three months since its beta launch. "The company believes that the forex service has the potential to impact and benefit over 1000 startups that are likely to raise foreign funding this year," the statement read.
At present, "Forex Transfers in India catering towards startup funding are riddled with several gaps" the statement read, adding. "The process is expensive, slow, and complicated, involving multiple compliance paperwork with poor visibility on progress, eventually taking up over 2 months in addition to a hefty late submission fee which compounds with each day of delay. For instance, if a founder raises $10mn in funding, the compounding late fee will cost them upwards of INR 20,000 at least with every passing month."
“India has become one of the most attractive investment destinations globally over the years, resulting in a 20-fold jump in FDI inflows since 2003-04. However, owing to the complex processes involved, the majority of the inflow is restricted to a handful of companies who can navigate through the long and expensive compliance processes," Rahul Kothari, Chief Business Officer, Razorpay said,
"Through our conversation with over 50 founders and several global investors, we realised that to increase the leverage of foreign funds for the Indian startup ecosystem, we needed to solve for the trifecta of dense paperwork, compliance and burgeoning costs. Our aim therefore was to foray into a new segment and create a solution that would help democratise foreign funds for startups," he added.
RazorpayX Forex Service is enabled with the help of its existing partner banks like RBL Bank and other leading banks — the process is now cost-effective, transparent, and faster via a seamless single window offering. The service extends competitive forex rates, and has no hidden costs. With dedicated forex experts who are specialized in working with startups, the process is made simple and seamless due to automated paperwork.
First Published: Jan 30, 2023 1:45 PM IST
