Ghar wapsi: Indian startups returning home in droves

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EmploymentFinancesVirtual Offices

After many years of registering their main offices in other countries, more and more Indian startups are now moving their headquarters back to India. Companies like Razorpay, Udaan, Pine Labs, and Meesho are changing their earlier decision, and Zepto has already finished the move.

This new trend is called “reverse flipping.” It is becoming popular because it’s now easier to follow Indian rules, India’s economy is growing fast, and companies see better chances to launch their shares in the stock market (IPO) in India.

Moving a company back to India is not simple. Startups need to get many legal and government approvals, and they may have to pay a lot in taxes. Still, India’s growing stock market is giving them a good reason to return.

Alok Bathija, a partner at Accel, said that in India, a software company earning $50–60 million a year can now go public (sell shares through an IPO). But in the US, a company would need to earn about $500 million to do the same. Since Indian markets now give better value and are easier to access, more startups are choosing to come back.

Besides aiming to go public (IPO), moving their headquarters back to India helps startups—especially fintech companies—follow local rules more easily. Most of these companies earn their money in India and work within the Indian financial system. So, it makes sense for them to follow Indian laws.

Amit Nawka, a partner at PwC, said fintech companies are an important part of India’s financial system. As they grow and have a bigger role in the economy, it’s better for them to be based in India.

Another big reason for startups moving back to India is the growth of local funding options. In the past, startups set up their headquarters abroad to get easier access to global investors, especially those in the US. But now, that’s not necessary.

Siddarth Pai, co-chair of the Indian Venture and Alternate Capital Association (IVCA), said that Indian family offices and local venture capital funds are now stepping in to support startups. He added that it’s not just the startups planning IPOs—many others are also thinking about shifting back to India.

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