Not for Rs 6700 crore, Sachin Bansal is leaving Flipkart because no one wants him there

Mangalore Today News Network

New Delhi, May 12, 2018 : Its official. American retail giant Walmart has acquired Flipkart in a deal that values the Indian company for $20.8 billion. Walmart has acquired 77 per cent shares in the Flipkart for around $16 billion, which gives it the controlling rights in the Indian e-commerce company.

 

"Walmart will pay approximately $16 billion for an initial stake of approximately 77 per cent in Flipkart, formally Flipkart Private Limited. The remainder of the business will be held by some of Flipkarts existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp," Walmart wrote in its blog.

Shortly after Walmart put out a release announcing the acquisition, Flipkarts co-founder Sachin Bansal resigned from the company and announced his departure in a sad and rather cryptic Facebook post.

"Sadly my work here is done and after 10 years, its time to hand over the baton and move on from Flipkart. But Ill be watching and cheering from the outside," Sachin Bansal wrote in his message.

A day later, Flipkart co-founder and Sachin Bansals friend, Binny Bansal wrote a farewell letter on Flipkarts blog for Sachin. "Sachin will always be seen as the face of that new, tech-powered Flipkart. A visionary, Sachin was instrumental in making Flipkart a tech-driven company, and ensuring the latest innovations were developed," he wrote in the blog, giving some much-needed attribution to a person whose name and presence were missing from Walmart’s official press release and from the photos that Flipkart and Walmart shared with media after the deal.

But why did Sachin leave the company he co-founded, and nurtured almost whole of his working life? He put so much in it. And now he is no longer part of it.

The easy answer is that he is leaving because he is getting good money for it. Sachin is not leaving empty handed. He got a little over $1 billion (Rs 6700 crore) for selling his 5.5 per cent stake in the company, which by all means is not a bad deal.

But the easy answer may not be the right one. Now reports are coming out that Sachin Bansal didn’t leave because he got an offer he couldn’t refuse. He is leaving because he is allegedly unwanted at the new Walmart-owned Flipkart. He is leaving because no one wants him to stay.

According to a LiveMint report, Sachins relations with Binny, former CEO Kalyan Krishnamurthy and rest of the team members soured during and after 2014. That is the time when he made several decisions that apparently hit the future prospects of Flipkart and gave Amazon a footing in India’s e-retail market.

The first big issue was Flipkart’s move to app-only mode. In 2013, Sachin led Flipkart mobile app project. After seeing spike in the usage of the app, he insisted on shutting down the website and turning Flipkart into an app-only platform. This was disastrous. Soon Flipkart realised its mistake and reversed the decision, it again started the web operations.

Then Sachin decided that the company didnt need advertising if its product and services were good enough for the people. But that idea too reportedly failed. While his ideas didn’t bring the desired results, Sachin lost both his credibility among the investors and his position as the companys CEO. More significantly he probably lost friends within the company.

But reports coming out paint a picture that indicates Sachin didn’t realise just how much support he had lost in the last few years. When Walmart reportedly reached out to Flipkart with a proposal, Sachin was confident about getting a bigger role and stronger rights in the company. However, he was allegedly outmanoeuvred by Kalyan Krishnamurthy, whom Walmart wanted to retain as the CEO, and Tiger Global, one of Sachin Bansals biggest backers in the old days (but now no longer in love with him). What transpired after that is now history.



courtesy: Yahoo