Razorpay Completes Reverse Flip, Moves Parent Entity from US to India

Y Combinator and Peak XV-backed fintech unicorn Razorpay has officially completed its reverse flip process, transferring its parent company’s domicile from the United States to India. This restructuring merges Razorpay’s US-registered parent entity with its Indian subsidiary, Razorpay Software India Pvt Ltd, consolidating the company’s operations under Indian jurisdiction.

Highlights:

• Razorpay completed reverse flip merging US parent with Indian subsidiary.

• Process initiated in May 2023, aimed at aligning domicile ahead of planned IPO.

• Indian regulatory reforms reduced reverse merger time from 12-18 months to 3-4 months.

• Razorpay aims for IPO around FY28 after 6-8 quarters of clean financials.

Strategic Move Ahead of IPO Plans

The reverse flip was started in May 2023 as part of Razorpay’s strategic plan to list on Indian stock exchanges. Moving the parent company’s domicile closer to its core market helps the fintech firm align with regulatory frameworks and investor expectations in India.

CEO and co-founder Harshil Mathur had earlier stated that the IPO is expected roughly two years after Razorpay’s businesses break even, with a focus on maintaining clean financials for 6-8 quarters prior to the listing.

Highlights:

• Reverse flip aligns Razorpay’s corporate structure with its primary Indian market.

• IPO preparations include strengthening financial records post-break-even.

• Expected IPO timeline: FY28 or two years post business break-even.

Reflecting a Broader Startup Trend

Razorpay’s move mirrors a growing trend among Indian startups like PhonePe, Groww, and Zepto, which have also shifted their legal domiciles from the US back to India. The government’s regulatory reforms have played a key role, speeding up the reverse merger timeline significantly, thus encouraging startups to realign their corporate structure with India’s domestic market.

Highlights:

• Razorpay joins startups like PhonePe, Groww, Zepto in repatriating domicile.

• Government reforms shortened reverse flip duration from over a year to a few months.

• Easier regulatory environment promotes closer alignment with Indian capital markets.

Company Background and Funding

Founded in 2014 by Shashank Kumar and Harshil Mathur, Razorpay has grown rapidly, becoming one of India’s leading fintech unicorns. It has attracted over $740 million in investments from prominent investors including Y Combinator, GIC, Sequoia Capital India, Ribbit Capital, Matrix Partners, and MasterCard. The company was last valued at over $7 billion.

Highlights:

• Founded in 2014 by Shashank Kumar and Harshil Mathur.

• Raised over $740 million from global and domestic investors.

• Latest valuation exceeds $7 billion, underscoring strong market position.