The business anticipates that this currency service, which now has an annualized run rate of Rs 350 crore, would scale up by 3–4 times in the upcoming fiscal year.
On Monday, RazorpayX, the business banking division of the fintech startup Razorpay, announced its entry into the “Forex Service for 1,000 Startups” product line.
The business anticipates that this FX service would grow up by three to four times in the upcoming fiscal year from its current annualized run rate of Rs 350 crore.
Currently, FX transfers for startup investment in India are rife with gaps, requiring over 2 months to complete in addition to a high late application cost that increases with each additional day of delay.
For instance, the compounding late charge will cost a founder $10 million in fundraising, costing them at least Rs 20,000 more each month.
According to Rahul Kothari, Chief Business Officer of Razorpay, “through our conversations with over 50 founders and several global investors, we realized that in order to increase the leverage of foreign funds for the Indian startup ecosystem, we needed to solve for the trifecta of dense paperwork, compliance, and rising costs.
The service has helped more than 15 firms, including Virohan, Tortoise, and Coupl, bring millions of dollars to India within three months of its beta debut.
Over 1,000 businesses that are anticipated to obtain international capital this year might potentially be impacted and benefited from the FX service, according to the firm.
Eight out of ten founders found that they could have gotten a better exchange rate, according to research from Razorpay.
In addition to exchange rates, according to VCs, administration costs and conversion fees can often leak 2-4 percent of the capital amount.