Groww, like PhonePe before it, has chosen India as its new headquarters, marking the second major start-up to do so. Initially established in the US eight years ago with the backing of Y Combinator, Groww heeded the advice of its accelerator to improve fundraising prospects. However, the company’s plans have shifted over time, now aiming to launch an IPO in India, prompting the relocation.
Following a similar path, PhonePe had previously moved its base to India, despite incurring significant expenses of INR 8,000 Cr during the transition from Singapore. Now, several other Indian start-ups, including Zepto, RazorPay, Meesho, Livspace and PineLabs are preparing to follow suit and return to India.
What motivates these start-ups to reverse their course and accept the financial burden of higher taxes?
A key driving force is the tightening of regulations. Indian regulatory bodies like the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) have heightened their scrutiny of companies in the financial services sector, now demanding detailed disclosures on funding sources and domiciliary arrangements before granting licenses.
Furthermore, these start-ups are gearing up for IPOs, seeking to raise capital from the market at more favourable valuations. Operating within India presents unparalleled opportunities for business expansion and accessing capital markets, making it the preferred destination for those seeking growth
