According to the company, the service has enabled over 15 startups in the edtech, fintech, and financial services sectors, including Virohan, Tortoise, and Coupl, to bring Rs 350 crore in annualised run rate (ARR) to India in the three months since its beta launch.
The business banking division of payment gateway Razorpay, has launched a new product line called 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”.
According to a press release, the service has enabled over 15 startups across the edtech, fintech, and financial services sectors, including Virohan, Tortoise, and Coupl, 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 expected to raise foreign funding this year,” according to the statement.
Currently, “Forex Transfers in India catering to startup funding are riddled with several gaps,” according to the statement.
“The process is costly, slow, and complicated, involving multiple compliance paperwork with little visibility into progress, eventually taking more than two months in addition to a hefty late submission fee that compounds with each day of delay. For example, if a founder raises $10 million in funding, the compounding late fee will cost them at least INR 20,000 per 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, due to the complex processes involved, the majority of the inflow is restricted to a handful of companies that can navigate the long and expensive compliance processes,” Razorpay Chief Business Officer Rahul Kothari said.
“We realised, after speaking with over 50 founders and several global investors,
that in order to increase the leverage of foreign funds for the Indian startup ecosystem, we needed to address the trifecta of dense paperwork, compliance, and escalating costs. Our goal was to enter a new market and develop a solution to help democratise foreign funds for startups “He went on to say.
RazorpayX Forex Service is now available thanks to existing partner banks such as RBL Bank and other leading banks — the process is now more cost-effective, transparent, and faster thanks to a seamless single window offering. The service provides competitive forex rates with no hidden fees. Because of automated paperwork and dedicated forex experts who specialise in working with startups, the process is made simple and seamless.