Indian Startups Return Home from Overseas Ventures, Following PhonePe’s Lead
A growing number of Indian startups are looking to bring their businesses back to India after initially venturing abroad. Inspired by the recent move of Walmart-owned fintech firm PhonePe, which relocated its base from Singapore to India in September 2022, startups like Razorpay and Groww are now considering a similar shift.
Razorpay, a digital payments firm valued at $7.5 billion, originally moved its operations to the United States to secure funding from Y Combinator. However, the company has now initiated a multi-layered process to bring its parent entity back to India, a move supported by its management and board. If completed, this shift could pave the way for a potential IPO listing for the payments firm. However, discussions on the reverse flip may involve a significant tax payment of $250-300 million in the US.
While Razorpay’s Chief Business Officer, Rahul Kothari, previously stated that there were no immediate plans for a reverse flip, the founder of Razorpay, Shashank Kumar, has expressed optimism about India’s growing fintech landscape. Kumar emphasized the importance of streamlining processes for businesses, especially in the context of expanding digital commerce.
Reports have also emerged suggesting that Groww, a full-stack financial services platform, is exploring the possibility of moving its domicile from the US to India. In November, the wealth management firm applied to the National Company Law Tribunal for a cross-country merger, pending clearance from the Karnataka tax department, the Reserve Bank of India (RBI), and other regulatory bodies.
Joining the wave of returning startups is Pine Labs, a payments firm valued at $5 billion. Pine Labs CEO Amrish Rau believes that decisions on relocation should consider whether the technology being built is meant for global or domestic markets. Other companies, such as online shopping platform Meesho and B2B e-commerce firm Udaan, are also reportedly planning to move their holding companies back to India. In fact, Udaan has even decided to pursue a public listing within the next year. These strategic shifts reflect an increasing focus on India’s evolving fintech landscape and the positioning of these companies in the global market.
As Indian startups follow the lead of PhonePe in returning home, the tech industry landscape in India is poised for further growth and innovation. With companies like Razorpay, Groww, and Pine Labs at the forefront, the future of India’s fintech sector looks promising. As these startups make their way back to India, they are set to contribute to the country’s thriving ecosystem and potentially reshape the global financial technology industry.
