Merchant-focused payments provider Razorpay has reported a flat net profit of Rs 7.3 crore for the fiscal year 2022-2023 (FY23), despite its revenues seeing a jump.
Revenue from operations for Razorpay Software Pvt Ltd (RSPL) stood at Rs 2,279 crore in FY23, a 54% surge from Rs 1,481 crore in FY22.
RSPL is the main place where Razorpay does its payment business.
In the year FY23, the total costs for this fintech company, supported by Tiger Global and Ribbit Capital, went up by 55%. They spent Rs 2,283 crore.
One big reason for these expenses is the money spent on employees and their benefits, which made up 28% of all expenses. In FY23, they spent Rs 638 crore on employee benefits, up from Rs 372 crore in FY22.
Razorpay is planning to move its official location back to India by the end of FY25. This move might make the company pay a tax bill of $250-$300 million in the US.
The CEO of Razorpay, Harshil Mathur, wants the company to be profitable in all its business areas in the next two years before considering listing on the Indian stock exchanges. He mentioned that they are at least two years away from an IPO. Right now, the online payments part of the business is already breaking even.
Apart from payments, Razorpay is involved in other areas like lending, offline payments, and additional services. The payments section is making a profit.
Razorpay has gathered a total of $741.5 million in funds. In December 2021, they raised $375 million in a funding round led by Lone Pine Capital, Alkeon Capital, and TCV. This funding round valued the startup at $7.5 billion.
After being banned for a year, the Reserve Bank of India (RBI) allowed Razorpay to add new merchants to its payment gateway business in December. Razorpay's rival, Cashfree, also got permission to add new businesses.
According to Mathur, Razorpay attracted 60,000-70,000 new merchants to its platform in the first two weeks after the ban was lifted. They onboarded about 10,000 new merchants within a week of restarting the onboarding process.