Lightspeed may invest in Razorpay’s $100 million secondary share sale

Bangalore: Digital payments major RazorPay is stringing together secondary share sale transactions worth $80-100 million, with new investors including Lightspeed Venture Partners joining the company’s cap table, sources said.

Bengaluru-based Razorpay, valued at $7.5 billion after a $375 million funding round in December last year, is likely to close the secondary deal in the coming weeks.

The startup’s angel investors, employees and a few other investors are selling shares in one of the largest secondary sale deals since the company’s inception. In a secondary share sale, new investors buy shares from existing investors but the money does not go to the company.

Sources said that Razorpay’s founders may also sell a small part of their stake in the company, but this has not been finalized yet.

As is usually the case with secondary transactions, the deal could be executed at a valuation slightly lower than Razorpay’s last round valuation. “Some of the incoming investors wanted to participate in the December round but could not accommodate, now it is going through secondary,” said one of the people informed about the matter.

Razorpay cofounder and CEO Harshil Mathur declined to comment, while emails sent to Lightspeed Venture Partners did not elicit any response.

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“As part of the secondary deal, some angels have already sold their stake in the company. Apart from Lightspeed, there may be one or two more new investors coming in,” said another person.

Sources said the final size of the transaction would depend on how much RazorPay employees are willing to disinvest. The secondary sale could result in a significant windfall for existing investors as Razorpay’s valuation jumped two and a half times in eight months when it closed its previous funding round in December.

Founded in 2014 by Mathur and Shashank Kumar, Razorpay is one of the most valuable Indian Fintech startups in India. It has raised over $740 million from investors such as GIC, Tiger Global, Sequoia Capital and others.

Razorpay is also making acquisitions in India and abroad, the most recent being the acquisition of IZealiant Technologies in March. In February, it acquired Malaysian fintech firm Curlake.

Razorpay saw annual total payment volume (TPV) of $60 billion in calendar year 2021 and aims to reach $90 billion by the end of 2022.

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