How Razorpay Became India’s Largest Payments Company

Harshil Mathur, co-founder of Razorpay (India's largest payments platform), was interviewed about the company's journey from its founding through Y Combinator's Winter 2015 batch to becoming a dominant fintech player. Mathur, a self-described techie with no finance background, stumbled upon the payments problem while trying to accept payments for a side project, noticing that digital payments in India were harder than cash transactions — the opposite of what technology should enable.

Razorpay's early GTM strategy targeted educational institutions for fee collection, but this failed because schools knew students would pay regardless of the payment method, so there was no incentive to digitize. The pivot to serving startups in co-working spaces proved far more successful, as those founders actively wanted digital payment solutions.

One of the most critical challenges came shortly after their YC Demo Day when their bank partner abruptly pulled the plug on their platform, shutting down all ~50 live merchants. Rather than going silent, Harshil and his team personally called every affected merchant, listened to complaints and abuse, and transparently communicated what was happening and what they were doing about it. This crisis cemented Razorpay's culture of human-centered B2B trust, a principle they maintain today — even choosing not to replace customer support with AI because human contact is their primary trust-building channel.

On capital efficiency, Razorpay raised ~$11M in their Series A but burned less than $200K/month, even putting money in fixed deposits earning more in interest than their burn rate. Their investor was unhappy, but Harshil argued that B2B businesses should grow based on the value they deliver, not by burning capital to acquire and retain customers the way B2C companies do.

A pivotal strategic bet was integrating UPI (Unified Payments Interface) in September-October 2016, months before the two largest Indian banks had even joined the network. When demonetization hit in November 2016 and UPI adoption exploded, Razorpay was the only payment gateway ready at scale, winning customers like Zomato, Swiggy, and BookMyShow in a matter of weeks. It took competitors six months to match their UPI readiness.

On AI, Mathur described a deliberate effort to avoid the 'incumbent fallacy' by completely reimagining what Razorpay would look like if built from scratch today, then rebuilding the platform accordingly. He uses tools like Claude and Claude Code personally and argues that AI will compress the build process so dramatically that the only lasting differentiation will be knowing *what* to build and how fast you can decide — not the building itself.

Reflecting on leadership evolution, Mathur admitted to spending a few years in 'manager mode' after hiring strong executives, which he now considers a mistake. He argues founders must stay deeply involved in the things that matter most — especially product vision — because no leader will ever care about the company as much as the founder does.

His closing advice to aspiring founders: don't latch onto a problem just because AI makes it easy to build something. The real question is whether you can spend the next 10 years of your life solving that problem, because that's what building a lasting company requires.