PhonePe Returns To Home Shores, Moves Domicile From Singapore To India

For years, Indian startups have been moving their headquarters abroad, partly for tax reasons and partly to access global fund flows. But a major Indian startup, years after having relocated abroad, has now decided to return to home shores.

PhonePe has completed its move to move its headquarters from Singapore to India. The process to move PhonePe’s headquarters back to India had begun earlier this year, and has now concluded. The move was a part of a corporate restructuring which saw PhonePe become a separate entity from its parent company, Flipkart.

“Setting up (Flipkart and PhonePe) as separate entities will also provide value and create new opportunities for investors to participate in the Indian tech ecosystem – helping unlock and maximize enterprise value for shareholders of the two companies,” the two companies said in a joint statement. “As part of this transaction, existing Flipkart Singapore and PhonePe Singapore shareholders, led by Walmart, have purchased shares directly in PhonePe India. This also completes the move to make PhonePe a fully India-domiciled company, a process that started earlier this year,” the statement added.

PhonePe and Flipkart have had a curious on-off relationship. In December 2015, two Flipkart engineers, Sameer Nigam and Rahul Chari, had quit Flipkart to launch a new payments app they named PhonePe. But just five months later, in April 2016, Flipkart had acquired PhonePe for $20 million. As demonetization was announced in November 2016, PhonePe had been one of the first few apps to come up with a UPI solution, and it maintains this lead to this day, currently accounting for more than 40% of India’s UPI transactions. As PhonePe accumulated users and expanded its product portfolio, it grew to be alone worth as much $12 billion, which makes it India’s highest-valued fintech startup. But come 2022, Flipkart has parted ways with PhonePe, and the two are separate entities again.

Crucially, this has also led to PhonePe moving its headquarters back to India A move back to India could help the company with its IPO plans, and also help it steer clear of regulatory hurdles that foreign firms might face in the fintech sector. “We are a made-in-India company,” PhonePe CEO Sameer Nigam had said earlier this year. “Every office, data centre, and employee of ours is here. There is no reason why we should not contribute to wealth creation in this market,” he had added.

PhonePe is bucking a trend that has persisted for several years — as many as 20% of “Indian” unicorns are headquartered abroad, including Fractal Analytics, Amagi, CommerceIQ, Hasura, BrowserStack, ChargeBee, Mindtickle, GupShup and others. These startups have moved abroad for a variety of reasons, including tax savings, ease in raising funds, and ease pf regulatory processes. But over the last few years, the Indian government has been looking to woo these startups back to India, and has even liberalized rules for these companies to go public in India. PhonePe is one of India’s most recognizable startups, and also one of its most valuable, and its homecoming could spur many other Indian startups to similarly return to their country of origin.