Startups get a makeover, rename parent firms to signal scale, IPO readiness

India’s startup ecosystem is in the middle of an identity shift. There is a trend of rebranding of companies, which, for many, signals ambition and readiness to get into newer businesses. 

Investors and brand strategists opine that changing the names of parent entities enables companies to signal their scale, position themselves as multi-segment businesses rather than single-product ventures, and simplify their structures ahead of initial public offerings (IPOs). 

The latest to join this rebranding wave is Oravel Stays Limited, the parent company of OYO, which earlier this month unveiled a new corporate identity — PRISM. The shift is symbolic. OYO may still be the brand, where consumers book their hotels on, but PRISM is meant to represent the group’s larger canvas, a reflection of founder Ritesh Agarwal’s vision of a “future-ready” corporate architecture. 

Not long ago, food delivery platform Zomato also changed the name of its parent entity to Eternal. On a global level, Google changed its name to Alphabet, and Facebook transitioned to Meta. 

Angel investor Lloyd Mathias, who also sits on the boards of several firms, said that rechristening the names of parent entities allows companies to have a full spectrum of brands within their ecosystem while also being able to ring-fence the core product. 

“First, the move signals diversification and the fact that companies have a broader ambition. Second, it future-proofs the narrative that the company is getting into more products, and it's a good way to signal to investors that they are not just a one-trick pony. Third, it creates a reduced risk as it is easier to separate cash cows, so companies can venture into high-risk items, and if they fail, the core business is not affected," Mathias said, adding that it is also a way to attract diversified talent for different businesses in cases where firms are usually known for a dominant product. 

What Mathias said also reflects in the founders’ explanation of this change in the branding. While announcing the change, Ritesh Agarwal, founder and group chief executive officer (CEO) of PRISM, stated that the transition to PRISM marks the establishment of a “future-ready” corporate architecture designed to “align our expanding portfolio with our long-term vision”. 

Similarly, Eternal's founder and CEO Deepinder Goyal had said that the decision to shift from Zomato to Eternal reflects the company’s evolution beyond its core food delivery app, with Blinkit emerging as a growth driver. 

Harish Bijoor, business and brand strategy specialist, said: "Investors like to think of companies as living entities, and the rebranding exercise conveys to them that the firms want to do new things. The key idea is also to make the companies look sharper and contemporary in the eyes of potential investors. In the case of PRISM, it allows the company to dabble in a lot more than just travel and stay." 

Samit Sinha, founder of Alchemist Brand Consulting, said it's a strategy called brand architecture where companies organise the portfolio of their brands. With the examples of OYO and Zomato, he said: "There are companies that usually start as a single-product or single-service company, and get known for a particular line of business, and the name gets very strongly associated with that line of business. Later, they feel that the name would be restrictive as they try to expand and diversify.” 

Not only startups, legacy companies also have undergone the same exercise. For instance, Infosys Technologies became Infosys Limited in 2011 to better reflect its diversified services portfolio, and even Wipro Products changed its name to simply Wipro in 1982 when it diversified into information technology. 

However, a broader business scope is not the only reason why startups change the names of their parent firms. In fact, another reason is to align the parent entity name with the consumer brand, improve brand recall, and simplify the structure ahead of the company's IPO. 

A few recent examples include Zepto, whose parent entity Kiranakart Technologies Pvt Ltd was renamed Zepto Pvt Ltd; Meesho, which rebranded its parent Fashnear Technologies Pvt Ltd as Meesho Pvt Ltd; and Swiggy, which streamlined its legal entity name from Bundl Technologies Pvt Ltd to Swiggy Pvt Ltd.

 

What’s in a name? 

Plenty, according to investors & brand strategists. Here is what they say: 

Changing parent entities’ names enables firms to position themselves as multi-segment businesses 

Additionally, it will help ring-fence the core product 

Rechristening will also aid companies in simplifying structures ahead of IPOs

Apart from signalling scale and boosting recall value, it will make firms look sharper and more contemporary in the eyes of potential investors