After raising $2.5 billion from SoftBank’s Masayoshi Son and his Vision Fund, Sachin Bansal and Binny Bansal are back in the driving seat at Flipkart, the company they founded over a decade ago.
The investment will make Son, through his Vision Fund, one among the largest shareholders in Flipkart and will lower the strength of Tiger Global on its board. Around $1.5 billion in the latest deal is being used to purchase shares from existing investors, largely from Tiger. The move could see the role of Kalyan Krishnamurthy, a former director at Tiger and the current CEO of Flipkart, being diluted.
Krishnamurthy was brought in by Tiger's Lee Fixel to help Flipkart fight off an aggressive Amazon. He played a role in getting long-term investors such as Tencent and Vision Fund, while giving a partial exit for Tiger in its biggest investment in India. “Kalyan was definitely Tiger’s man and the founders had been sidelined. It’s not assured that SoftBank will have trust in him despite him being a good performer,” said a person close to the development at Flipkart. “The founders have and are definitely looking at making a comeback.”
Ever since discussions of SoftBank picking a stake in Flipkart, through its failed merger of Snapdeal, began six months ago, the co-founders have been making their presence felt.
Sachin turned vocal on his contribution to building Flipkart’s in-house brand for the masses — Billion, which is targeted at bringing first-time customers onto its platform. Binny’s role in running the company’s logistics unit, eKart, was renewed after the exit of Nitin Seth. Moreover, both founders have strong follower base in the company, who criticize Krishnamurthy for putting innovation on the back burner.
While Krishnamurthy’s position at Flipkart is unsure, his role in reviving the company cannot be questioned. Right from the 2016 festive season sale — when he brokered few but crucial partnerships with brands and rallied prominent sellers to offer discounts — he ensured Flipkart not only stayed ahead of its rival Amazon but thrived.
In the months that followed, Krishnamurthy has been instrumental in helping Flipkart shed bulk. Taking a more sales-first approach, it can be said that he has executed his task perfectly — getting Flipkart fit enough for long-term investors such as SoftBank to take an interest and give Tiger an exit.