There has been a significant development in the operations of wealth management startup Groww, as its CEO Lalit Keshre announced on ‘X’ (formerly known as Twitter) that the company has officially moved its headquarters back to India from the US.
This was made possible through a reverse flip by its parent company. Keshre stated that as of March 2024, Groww has completed its transition back to India. Despite being based in the US, the company has always functioned as an India-based organization for practical purposes since its inception.
This move has resulted in all of Groww’s subsidiaries being based in India. Other major fintech startups, such as PhonePe (backed by Walmart), have also made the decision to relocate their headquarters from Singapore to India in October 2022.
According to reports, several Indian startups with foreign headquarters in the US and Singapore are also in the process of moving back to India.
Industry executives believe that this relocation is driven by the desire to benefit from the increasing valuations offered by the domestic public markets for technology ventures. Many of these startups had initially established their parent companies in the US or Singapore in order to quickly raise capital from overseas investors due to the existing regulations at the time.
However, the benefits of having an overseas entity are no longer applicable to Groww, which has been profitable for the past three years and did not require external funding for its relocation to India. It is still unclear how much tax the company has paid or will have to pay.
Groww was a member of the 2018 winter batch of YCombinator and was originally based in the US. For fintech startups, the decision to reverse-flip their holding companies to India is also influenced by the regulatory landscape.
Financial regulators prefer these firms to be registered in India and have all of their subsidiaries located here. At present, Groww is one of the largest fintech startups in the country. It has received funding from prominent investors such as Peak XV Partners, Tiger Global, and Ribbit Capital, and was valued at $3 billion in 2021.
