India hasn’t just created many startup unicorns of its own over the last few years, but it’s also contrinuted to growing the US’s unicorn count.
India has emerged as the third-largest source country for US-based unicorns that were initially founded abroad before relocating to America, according to recent data compiled by Stanford Graduate School of Business’ Venture Capital Initiative. The data reveals a compelling narrative about the global journey of successful startups and India’s significant contribution to the American innovation ecosystem.
The Rankings
Israel leads the pack with 44 unicorns that were originally founded there before moving to the United States, highlighting the strong tech corridor between Tel Aviv and Silicon Valley. The United Kingdom follows in second place with 17 such companies, while India claims the third spot with 12 unicorns-to-be that eventually relocated to the US.
Following India are France and Canada (7 each), Australia (7), China (4), and Russia (4), rounding out the top countries that have seen their homegrown startups make the strategic move across the Atlantic or Pacific.
The Indian Connection
Among the most prominent examples of Indian-founded unicorns that relocated to the US is Innovaccer, a healthcare technology SaaS startup that has made a significant mark in the American market. Founded in 2014 by IIT Kharagpur graduates Abhinav Shashank and Kanav Hasija, along with IIM Ahmedabad alumnus Sandeep Gupta, Innovaccer was initially established in Noida but maintains dual headquarters in San Francisco.
The company achieved unicorn status in 2021, becoming India’s first healthtech unicorn after raising funding in a Series D round led by Tiger Global Management. Today, Innovaccer’s Healthcare Data Activation Platform is used by over 50 healthcare organizations in the US, maintaining medical records of more than 24 million patients and generating savings of more than $600 million for healthcare providers. Other Indian companies that have become unicorns in the US include Postman, Fractal Analytics, MindTickle, Chargebee, BrowserStack, Hasura and GupShup.
Why The Move?
The phenomenon of Indian startups relocating to the US has become increasingly common, particularly in the B2B SaaS sector. Several factors drive this trend. The US market offers access to larger customer bases, better margins, and more favorable customer behavior, particularly for technology and SaaS companies. Additionally, the American ecosystem provides advantages in terms of easier access to capital, simpler listing procedures, and more favorable regulatory environments.
Taxation also plays a crucial role in relocation decisions. With India’s corporate tax rates averaging 25.17 percent compared to 21 percent in the US, 19 percent in the UK, and 17 percent in Singapore, many startups find offshore incorporation financially attractive. Complex capital gains tax structures and regulatory challenges in India have further incentivized this trend.
Beyond Company Relocation
The Indian contribution to American unicorns extends beyond companies that physically relocated. Indian-born founders have been instrumental in creating unicorns directly in the US. According to Stanford research, 90 of the 1,078 founders of 500 US unicorns between 1997 and 2019 were born in India, making it the top source country for immigrant unicorn founders.
Notable examples include Apoorva Mehta of Instacart, Baiju Bhatt of Robinhood, Rohan Seth of Clubhouse, and multiple founders of Nutanix. Indian founders of US unicorns span diverse sectors from fintech to edtech, from enterprise software to consumer applications.
A Growing Concern
While this global success story highlights the entrepreneurial prowess of Indian founders, it also raises concerns about brain drain and capital flight. According to the Hurun Global Unicorn Index, Indians have founded 109 unicorns outside of India compared to just 67 within the country. India now has the highest number of emigrant unicorn founders in the world.
The Indian government has taken note of this trend, with parliamentary panels calling for measures to accelerate “reverse flipping” through a more conducive business environment. Some success stories have already emerged, with fintech unicorn PhonePe relocating its headquarters from Singapore back to India in 2022, though the move cost the company approximately Rs 8,000 crore.
Looking Ahead
As India continues to develop its startup ecosystem and improve regulatory frameworks, the challenge will be to retain more of its innovative companies while supporting those that do relocate. The establishment of the International Financial Services Centre (IFSC) in GIFT City represents one such effort, offering tax advantages and a business-friendly environment to attract startups.
The data on internationally founded US unicorns reveals a complex global talent and capital flow, with India playing a pivotal role. Whether founding companies that relocate or sending entrepreneurs who build unicorns directly in the US, India’s contribution to the American innovation economy remains substantial. The question now is whether policy changes can help India capture more of this value creation within its own borders while maintaining its position as a global source of entrepreneurial talent.