Grofers Is Shifting To Singapore – Can’t We Stop This Exodus Of Digital Startups From India?
At a time when PM Modi is vigorously pushing Make in India vision, and encouraging MNCs to start their Indian operations, another digital startup from has decided to ditch its birthplace and shift their base overseas. By observing this trend of mass exodus of tech and digital startups from India to overseas countries, it seems there is a big problem which we are overlooking.
Grofers, backed by Sequoia Capital and one of the fastest rising online grocery delivery startup, has decided to shift base to Singapore. They have created a new entity called Grofers International, which would be based in Singapore. Their Indian operations would be controlled by a new subsidiary called, Grofers India (GIPL).
Confirming this development, Albinder Dhindsa, co-founder and CEO of Grofers said, “GIPL will be a 100% owned subsidiary of Singapore-based Grofers International,”
Besides looking for better business environment and friendlier regulations, this move can also be seen as Grofers’ attempt to capture other markets, besides India.
Albinder further said, “The move also opens up avenues of international listing in future. When you are a startup, restructuring is easier.”
But a company based in India can also expand into International markets.
Why did they decide to set up the parent company in Singapore and shift their base permanently?
Reduced tax structure on profits (its 17-19% in Singapore compared to 30%+ in India) and ease of getting venture funds from overseas investors can be the driving reasons.
But is there something else?
Other Startups that Shifted Overseas
Here are some other stars of Indian startup scene, which relocated to overseas in the past couple of years:
– Flipkart, the big daddy of Indian ecommerce registered their Singapore based parent company in 2011, and introduced a trend which is now unstoppable. Last year in December, they filed application with Singapore-based companies’ regulator ACRA to become a public company, based in Singapore.
– Knowlarity, a Cloud telephony startup shifted their base to Singapore in 2013, because as per their founder, Indian market is tough to crack in technological sector.
– Freshdesk, the cloud based software provider, was founded in 2010 by Girish Mathrubootham and Shan Krishnasamy. They have 300 strong team based in Chennai, but the company is headquartered in San Francisco, USA.
– Druva, the data protection startup was founded in 2008 by Milind Borate, Jaspreet Singh and Ramani Kothandaraman. After raising Series A funding in 2010, they shifted their base to USA
The reasons for such exodus of promising tech startups from India are not a secret: We shared 10 reasons why Singapore is more startup friendly than India; we have been sharing the ease of doing business ranking, which is dominated by Singapore; and we have explained why Singapore is the most livable city in the whole world.
We hope that Indian Govt. takes this issue on priority, and introduce wide scale reforms, which help Indian companies to stay in India.
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