Razorpay initiates “reverse flipping” to relocate parent entity to India: Report
- ByStartupStory | May 9, 2023
According to anonymous sources, Razorpay, a fintech unicorn, has begun the first step in a multi-step process to relocate its US-based parent entity to India. The Y Combinator-backed company, which established itself in the US to raise funds, acknowledged the situation when questioned by The Economic Times.
An unnamed source was quoted by The Economic Times as saying, “The management and board are keen on it. They have started the first phase of a multi-layered process to bring their parent entity back to India. Given the highly regulated nature of the financial services sector, it will require time and a significant amount of funds.”
According to an anonymous source, Razorpay has initiated the process of “reverse flipping”, which would make it the second major startup to relocate to India. This move is in line with the Indian government’s efforts to encourage fintech companies and startups to move to Gujarat International Finance Tech City’s International Financial Services Centre.
As per a report, PhonePe relocated from Singapore to India earlier this year to prepare for its public listing. The report also quoted an unnamed source who suggested that the digital payments company could potentially go public in India after its relocation. The source stated that “while an IPO is still in the distant future, the priority is to domicile the company in India”.
Razorpay, which has received backing from investors such as Tiger Global, Sequoia Capital India, GIC, Lone Pine Capital, Alkeon Capital, and TCV, was valued at approximately $7.5 billion during its latest funding round in December 2021. In the fiscal year 2022, the company saw a 75% increase in total revenue from Rs 844.6 crore to Rs 1,485.7 crore.
Razorpay achieved profitability in FY21 on a standalone basis and saw a profit of Rs 7.3 crore in FY22, up 18%. However, the company has yet to post consolidated profits. Razorpay was granted in-principle approval for a payment aggregator license, and it has also joined the Open Network for Digital Commerce (ONDC) with its payment reconciliation service for network participants, including buyers, sellers, and logistics providers.
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