Two boys, not brothers but good friends graduate from one of the most prestigious colleges of India, IIT Delhi and go on to join a retail giant like Amazon. They work for a couple of years and once they learn the ropes of the business, think like many of us do, think, “why can’t we do this in India?” The difference is most of only think, they worked on it.
Resigning from Amazon, they set up shop in a small apartment in Bangalore. They both begin with books – people order online for books and the duo themselves delivered the books, riding around on their scooter. The book business did well and they started offering other products too. Soon they became the poster boys of India’s internet start-up stories, what with bug names like Accel Partners, SAIF Partners, Tiger Global and sovereign funds of Singapore and Qatar coming in as investors.
The two boys, Sanjay Bansal and Binny Bansal had hit the big time! There was no looking back as they had founded the ‘Amazon’ of India. Some competition did come up – Myntra and Jabong but Flipkart bought Myntra in 2014 and Myntra in 2016, bought out Jabong – both are now under the Flipkart umbrella.
All going hunky dory and the story seemed like a fairy tale. And then enters the ‘Ravan’ in the disguise of a sage – Walmart. In August 2018, Walmart completed the acquisition of 77% or majority stake in Flipkart for $16 billion. The two boys had become multi-billionaires!
And then trouble started in paradise. First it was Sanjay who quit after he was time and again sidelined; that could be attributed to a few of his ideas which did not go well in the market.
Meanwhile Kalyan Krishnamurthy, former executive with Tiger Global, joined Flipkart in May’13 as interim sales and finance head. He had a bitter fallout with Sachin in 2014 and Krishnamurthy left. But Sachin himself left in early 2016 and Krishnamurthy rejoined in June 2016 and within a year, in Jan 2017, Binny, who was also being sidelined, was pushed out as CEO of the company, with no say in day-to-day matters. Thus it was just a matter of time before Binny too left though his reasons for leaving could have been better.
Today, the two poster boys have become billionaires but the way in which they both had to exit, leaves a very bitter taste in the mouth, raising many questions too. Krishnamurthy is today the Flipkart group CEO, bringing in Jabong and Myntra too into Flipkart’s fold. Ever since Myntra came into Flipkart, Tiger Global and SoftBank have wanted it to be integrated into the company while the founders wanted it to remain independent. Well, the wish of the Board is fulfilled and Krishnamurthy now officially answers to no one, except the Board.
No grouse against Krishnamurthy; its simple, he is capable and skilled, so he is best fit; survival is indeed of the fittest only. But what bothers one is whether in startups, it’s the investors who call the shots? Getting the founders out was a necessity for even Walmart to have a complete control. Is that what all this was about?
Both the Bansal’s have encashed big time; not even in their wildest dreams would they have imagined that they could become such big billionaires, that too in such short time. They have the money and the brain and maybe they will come with one more brilliant idea. Yes, it would have been painful to let go of Flipkart, something which they created; it’s akin to letting go of your child. Maybe the pain will lead to the creation of something new, something better?