In a move set to make waves in the fintech industry, Groww, a prominent full-stack financial services platform, is reportedly contemplating shifting its domicile from the United States to India. This strategic decision aligns Groww with other major fintech unicorns that have either initiated or expressed intentions to relocate their holding entities to India.
Citing sources familiar with the matter, it is revealed that Groww is considering the move in response to tighter regulations in the United States. While discussions are still in their preliminary stages, insiders suggest that the entire process could take several months to complete, emphasizing the significance and complexity of such a transition.
This development indicates a growing trend among fintech companies, as other industry giants are also exploring or undertaking similar moves. Notably, PhonePe, a popular digital payment platform, has already shifted its domicile from Singapore to India, while Razorpay, a leading online payments company, is actively working towards relocating its parent entity from the US to India. Rahul Chari, co-founder and Chief Technology Officer of PhonePe has even expressed that if regulatory conditions become more favourable, as many as 20 additional unicorns could consider shifting their domiciles to India.
It should be noted that transitioning domicile comes at a substantial cost for these companies. PhonePe’s investors, for example, were required to pay a staggering sum of Rs 8,000 crore in taxes to complete the relocation process successfully.
Recognizing the potential advantages and the long-term benefits of attracting local startups, the Indian government has been actively encouraging the re-domiciliation of such companies to India. The International Financial Services Centre (IFSC) at GIFT City has been designated as an ideal hub for these businesses to establish their operations and leverage international market opportunities. In further support of this initiative, According to an ET report, the government has assembled an expert committee comprising influential founders such as Lalit Keshre of Groww and Nikhil Kamath of Zerodha to guide and facilitate the relocation process.
KuklaTimes.com reached out to Groww for comments, but an immediate response has not been received at the time of reporting. Any updates on this matter will be promptly shared with our readers.
Groww, which boasts support from esteemed investors like Tiger Global, Sequoia India, Ribbit Capital, Y Combinator, and Microsoft CEO Satya Nadella, attained unicorn status in April 2021 after a successful Series D funding round that raised $83 million. Building on this achievement, the company secured an impressive $251 million in its subsequent funding round in October, valuing Groww at an impressive $3 billion.
Financially, Groww has witnessed exceptional growth, with revenue surging 11.7 times from Rs 30 crore in FY21 to Rs 351 crore in FY22. However, due to increased expenditure, the company experienced a threefold rise in losses, with FY22 losses amounting to Rs 239 crore compared to Rs 78 crore in the previous fiscal year. As of now, Groww is yet to file its financial results for FY23, which will provide further insight into its performance and trajectory.