Razorpay and Easebuzz Report Growth in Digital Payments Sector
Razorpay has announced a remarkable 65% growth year-on-year for the fiscal year ending March 2025, even as many payment aggregation and gateway companies struggled to maintain momentum. Similarly, Easebuzz, a startup specializing in payment infrastructure, saw its operating scale more than double in FY25, alongside a significant increase in its profit after tax (PAT).
Impressive Financial Performance of Easebuzz
According to financial statements submitted to the Registrar of Companies (RoC), Easebuzz’s revenue from operations skyrocketed nearly 2.3 times to Rs 656 crore in FY25, up from Rs 289 crore in FY24. As a B2B payment gateway catering to SMEs, Easebuzz offers plug-and-play APIs designed for payments, disbursements, and financial operations.
Key Revenue and Earnings Insights
In FY25, Easebuzz’s primary income of Rs 655.67 crore predominantly stemmed from transaction fees, with additional contributions amounting to Rs 36.4 lakh from IT and support fees. The company also generated Rs 2.9 crore in non-operating income from interest on fixed deposits and various other sources, culminating in a total income of Rs 659 crore for the last fiscal year.
Cost Analysis and Profitability
The largest expense for the digital payment firm was payment processing charges, which made up 86% of total costs, amounting to Rs 545.5 crore in FY25. This represented a growth of 2.4 times from the Rs 225.6 crore in FY24. Employee benefit expenses increased by 34% to Rs 51.94 crore, while IT expenses accounted for Rs 20.6 crore. Various other overheads, including rent, professional fees, and marketing, pushed total expenses to Rs 634.3 crore, marking a 119% rise from Rs 289.4 crore the previous fiscal year.
Revenue and Growth Metrics
With the rise in transaction volumes, both revenue and expenses doubled in FY25. However, the revenue growth outstripped costs, resulting in a profit of Rs 18.77 crore, compared to Rs 37.7 lakh in FY24. The company also saw improvements in its ROCE and EBITDA margins, which elevated to 18% and 4.27%, respectively. At the unit level, Easebuzz spent Re 0.97 to generate a rupee in FY25.
Current Assets and Funding Activities
As of March 2025, the company’s total current assets were valued at Rs 196.7 crore, which included Rs 142.2 crore in cash and bank balances. The Pune-based firm recently secured Rs 240 crore (approximately $28.2 million) in its Series A funding round, consisting of Rs 200 crore ($23.5 million) in primary capital and Rs 40 crore ($4.7 million) in secondary capital. 8i Ventures emerged as the largest external shareholder with a 10.88% stake, followed by Varanium Capital and Bessemer Venture Partners with holdings of 8.48% and 8.47%, respectively.
Future Developments and Challenges Ahead
This year, Easebuzz received final approval from the RBI to function as an online payment aggregator and is currently pursuing a cross-border payment aggregator license to tap into international markets. The company’s managing Director, Rohit Prasad, indicated plans for an IPO within the next two to three years.
Challenges and Market Opportunities
Despite achieving its financial projections for FY25, Easebuzz anticipates significant challenges ahead. The firm previously capitalized on a regulatory ban affecting larger payment giants, which facilitated the onboarding of new clients and enabled it to establish a strong presence in the education sector for fee collections. Now, it must explore new growth segments, including a move into offline payments. Additionally, a recent ban on real money gaming might eliminate a major growth opportunity. Nonetheless, the firm’s agility and strategic insight will provide valuable lessons as it navigates future development.