Published: 4/21/2021

Good morning, its Wednesday and the growth rounds (confirmed and unconfirmed) continue to roll in with Tiger and others continuing to be aggressive in the country. It also just feels slightly weird that Indian companies are raising massive amounts of money to accelerate future growth while the country itself is going through a scarier and deadlier second wave of COVID. And it doesn't sound like the ruling government is willing to accept blame for the situation and have reacted to situation too late. But on to the news today, Razorpay raises even more money and plans to expand to SE Asia and Druva raises a sizable round.

  • https://tcrn.ch/3n9lg6O: Razorpay raises capital at a $3B valuation, plans to enter SE Asia
  • ➡️ I am not at all surprised by this round at all, when Razorpay announced their last round in October, I knew it was only a matter of time before the next round was pre-empted. The round was led by existing investors Sequoia Capital India and Singapore's sovereign wealth fund GIC with participation from Tiger (of course! The firm has backed Razorpay since their Series A in 2015), Ribbit Capital, and Matrix Partners India.

    ➡️ Razorpay is often compared to being like the Stripe of India, but it actually has a much broader product line than the American payments infrastructure company with its business neo-banking product and a payroll product that has also been gaining popularity.

    ➡️ Stripe on the other hand hasn't been able to accomplish much in the country, and the company's India head also left this month after spending over 4 years at Stripe. And it seems Razorpay might now be looking to expand to other markets in SE Asia and potentially competing with local/global companies. The company plans to launch in 1-2 SE Asian markets by the end of the next financial year and having GIC might prove to be helpful here.

    ➡️ Interestingly the new fundraise might also lead to the company exploring M&A opportunities — Razorpay could be the next startup that invests in their corp dev + m&a team to accelerate the company's growth (the company's founders are also popular angel investors).

    ➡️ Razorpay's continual growth has been super impressive and their payments product has been growing 40-50% MoM in the last months (as India had been regaining normalcy). It would be interesting to see if that growth continues or if potential lockdowns affect the greater online economy. I don't think we're going to see a Razorpay IPO any time soon but I'm excited to see what this developer-first company can achieve in new geographies and I'm sure Stripe is beating itself up for not being able to acquire the company several years ago.

    2. https://tcrn.ch/3gr79IH: Druva raises $147M at a valuation north of $2B

    ➡️ It turns out Indian companies can raise growth rounds even when Tiger and SoftBank don't participate in them. Cloud data backup service Druva announced that it had raised an additional $147M in capital from Canadian pension fund CDPQ with participation from Neuberger Berman, Atreides Management and Viking Global Investors.

    ➡️ The round also included a secondary portion due to some of Druva's earlier investors reaching their end-of-fund cycle. This could potentially be Sequoia Capital India or Nexus Venture Partners who have been backing Druva since 2010 but could also be some of their other early investors (Dell's VC arm, Tenaya Capital among others).

    ➡️ Druva's business has also been accelerating and it had already hit the $100M ARR mark in 2019, which leads to the question around the company's eventual IPO, though it seems like we will still need to wait a bit on that front.

    ➡️ It does sound like the company is planning on investing on their team and hire aggressively to keep the company's growth rate strong, so when the IPO does happen the company can paint a successful narrative. At this point, I am getting a little exhausted with all the Indian companies raising growth rounds and just want to see some S-1s and public exits.

    Feedback & ❤️ always appreciated BONUS (Tweet of the day): https://twitter.com/gaganbiyani/status/1384577391834533898

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