Reverse Flipping of Startups

Reverse Flipping of Startups

Context: The Indian startups are returning to India from overseas locations. India has the 3rd largest startup ecosystem in the world, next to USA and China.

 Reverse-Flipping

o Reverse-flipping refers to the process of shifting a company’s domicile back to its home country from an overseas location to reposition itself for growth and success in its domestic market. E.g. PhonePe, Groww and Pine Labs have reverseflipped to India. 

Factors influencing Reverse Flipping

o Stock Market Valuations: India’s attractive stock market valuations make it an appealing destination for launching IPOs compared to the US primary market.

o Regulations in India, such as launching IPOs, data localisation requirements, and the easy securing of licenses, make it more favourable for startups to operate from within the country.

o Indian startups capitalise on untapped local demand in tech and internet sectors, engaging with domestic consumers and investors, etc.

o Indian-based startups benefit from accessing local investors and securing intellectual property rights by shifting operations back to India, which is crucial for investor confidence and business sustainability.

o Unicorn is a startup company with a value of over $1 billion.

o Decacorns are startups that have a valuation of over $10 billion.