RazorpayX Has Introduced A Forex Service For Founders To Support 1,000 Startups

RazorpayX has introduced a forex service for founders to support 1,000 startups. On Monday, RazorpayX, the business banking division of the fintech company Razorpay, announced its entry into the "Forex Service for Startups" product line.

The company expects 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 riddled 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 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," 

The service has helped more than 15 startups, including Virohan, Tortoise, and Coupl, bring crores to India within three months of its beta launch. The company thinks that over 1,000 startups 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. In addition to exchange rates, 2-4 percent of the capital amount can occasionally be lost to administration costs and conversion expenses, according to VCs.