RazorpayX launches forex service for founders, to empower 1,000 startups
Currently, forex 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
RazorpayX, the business banking platform of fintech company Razorpay, announced on Monday announced its foray into a new product line called 'Forex Service for Startups'.
The company anticipates that this forex service will scale up by three to four times in the upcoming fiscal year from its current annualised run rate of Rs 350 crore.
Currently, forex 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 example, if a founder raises $10 million in funding, the compounding late fee will cost them at least Rs 20,000 per month.
"Through our conversation with over 50 founders and several global investors, we realised that to increase the leverage of foreign funds for the Indian startup ecosystem, we needed to solve for the trifecta of dense paperwork, compliance and burgeoning costs," said Rahul Kothari, Chief Business Officer, Razorpay.
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.
The business thinks that over 1,000 companies who are likely to secure international capital this year could be impacted and benefited by the forex service.
According to research from Razorpay, eight out of ten founders concluded that they could have gotten a better exchange rate.
VCs assert that administration and conversion costs account for 2-4 percent of the capital amount, in addition to currency swings.
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