Groww Sees 30% Valuation Cut In Reverse Flip Move: Report

Fintech company Groww has reportedly seen its fair market valuation being slashed to under $2 Bn after the company shifted its domicile from the US to India in May.

As per ET, citing people close to the matter, digital payments major Razorpay, which has sought board approval to shift its domicile to India, may likely see the same situation with a 30-40% cut in its valuation. 

Groww paid INR 1,340 Cr ($160 Mn) in taxes to the US government, based on the new fair market value (FMV), which is more than 30% lower than its $3 Bn valuation during its last funding in 2021, the report added.

Reverse flipping is when companies that are domiciled in foreign countries want to return to their home country. Fintech players are reverse flipping to India mainly due to the tightening regulatory norms.

Groww merged its US-based holding company, Groww Inc, with its Indian parent entity, Billionbrains Garage Ventures.

With this, the company’s only registered entity is now Billionbrains Garage, which is headquartered in Bengaluru.

Inc42 learnt from the sources in May that Groww established the holding entity in the US as it was easier to raise capital.

“At that time, it was easier to access capital in the US as the startup boom was yet to happen in India. However, over the past three years, we have managed to maintain a healthy financial condition and there hasn’t been any need to raise any fresh funds. Hence, the entity wasn’t serving us any purpose,” said one of the sources.

After PhonePe shifted its domicile from Singapore in 2022, Groww became the second major startup to shift domicile to India.

Meanwhile, Razorpay is also planning to relocate its parent company to India through a cross-country merger. The shifting may incur a tax payment of $250 Mn – $300 Mn in Razorpay’s current domicile, the US.

Apart from the aforementioned companies, other Indian startups, including Zepto, Eruditus and Pine Labs are also looking to reverse flip.