Bengaluru: Flipkart has elevated former Tiger Global Management executive Kalyan Krishnamurthy as its new chief executive, replacing co-founder Binny Bansal, who has been named as the group chief executive of India’s largest online marketplace.
Co-founder Sachin Bansal continues to be executive chairman.
As part of the new organizational structure, Binny Bansal will oversee functions such as capital allocation across all the group companies, merger and acquisition activities, CEO selection at group companies such as Myntra-Jabong and PhonePe, in what is being seen internally as a potential move to ensure the company’s readiness for an initial public offering (IPO) in a few years.
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“2016 has been a truly extraordinary year for us, from a growth perspective. We’ve effected a complete turnaround of our business and consolidated our leadership position in e-commerce,” Binny Bansal said in an interview. “What I want to do now...is keep the focus on growth and innovation over the next few years, but also create new engines of growth with PhonePe and somewhat with logistics with eKart.”
The Bansals together currently own 14-15% in Flipkart. Flipkart will also soon hire a group chief financial officer, Bansal added.
Under the new structure and in his new role as Flipkart CEO, Krishnamurthy will be responsible for the Flipkart profit and loss account, the company said. He will report to Binny Bansal.
Flipkart’s current chief administrative officer Nitin Seth is being elevated to the role of chief operating officer, in addition to his existing role of human resources head. Seth and Flipkart’s head of engineering Ravi Garikipati will now report to Krishnamurthy.
Ananth Narayanan will continue to be the CEO of Myntra-Jabong and Sameer Nigam will continue as CEO of PhonePe, Flipkart said. Narayanan and Nigam will report to Binny Bansal.
Saikiran Krishnamurthy, who was previously heading Flipkart’s logistics and supply chain business eKart, will help Binny Bansal set up the group CEO’s office.
The latest shake-up does not come as a complete surprise and was being speculated about internally for at least a month, according to several company executives that Mint spoke to.
“Kalyan was anyway running the show before this, so this isn’t a complete surprise,” said one of the Flipkart executives, who requested anonymity.
The management overhaul also highlights how Flipkart’s largest investor Tiger Global and the company’s figurative godfather Lee Fixel are now firmly in the driver’s seat and calling the shots at the boardroom of India’s e-commerce poster boy.
Last year, in an almost identical move, Flipkart’s board had moved out co-founder Sachin Bansal from the role of CEO and put Binny Bansal in the hot seat.
“2016 started with some challenges, but over the year it’s been tremendous from a growth point of view... we finished the year on a very positive note and we want to continue with that momentum in 2017,” Krishnamurthy said in an interview.
Over the last 12 months, Flipkart briefly lost its No. 1 position to Amazon India, was hit by a top-level exodus that saw more than half a dozen executives, including its CFO, quitting and witnessed multiple markdowns in its valuation from investors such as Morgan Stanley.
Last June, Flipkart turned to Krishnamurthy, a key aide of Fixel, to help pull the company out of arguably the biggest crisis it has faced in its 10-year existence. At the time of Krishnamurthy’s return, Flipkart was losing tens of millions of dollars every month.
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Since Krishnamurthy’s return, Flipkart has witnessed the beginning of a revival of its former fortunes, which started during the crucial Diwali season sale in October when Flipkart saw off Amazon India’s challenge and triumphed over its American rival in what was arguably the biggest showdown in the history of Indian e-commerce.
According to the executives mentioned above, Krishnamurthy was in complete charge of Flipkart’s Big Billion Day (BBD) sale, in what was a crucial sign of things to come.
Krishnamurthy’s appointment also comes at a time when Flipkart is looking to raise a fresh round of funds at its preferred valuation of $15 billion, as Mint first reported in October. According to people aware of the talks, Flipkart is expected to close the fundraising over the next 2-3 months, around the close of the 2016-17 financial year.
Flipkart has raised more than $2.5 billion over the past three years.