Ghar wapsi: Indian startups returning home in droves

After years of setting up legal headquarters abroad, Indian startups are increasingly shifting their domicile back to India. Companies such as Razorpay, Udaan, Pine Labs, and Meesho are reversing their earlier decisions, while Zepto has already completed the transition. The trend, known as “reverse flipping,” is being driven by improved IPO prospects, easier compliance, and India's strong economic growth.

The shift is not straightforward, with companies requiring multiple legal and regulatory approvals and paying significant taxes. However, India’s maturing capital market is providing a compelling reason for startups to return. Alok Bathija, Partner at Accel, said that while a software firm with $50-$60 million in revenue can now list in India, a similar listing in the US would require nearly $500 million in revenue. With Indian markets offering higher valuations and greater accessibility, more startups are choosing to relocate.

Beyond IPO aspirations, bringing headquarters back to India simplifies regulatory compliance, especially for fintech startups. Many of these firms generate most of their revenue within India and operate under its financial system, making it logical to align with domestic regulations. Amit Nawka, Partner at PwC, pointed out that fintechs play a crucial role in India's financial landscape and benefit from being headquartered locally. “As far as fintechs are concerned, as they get larger and contribute to India’s financial system, it is appropriate for them to be headquartered here, and it