SoftBank deal impact: Flipkart founders set to play more active roles in their firm
Bengaluru: Flipkart co-founder and group CEO Binny Bansal will start playing a more active role in the company, along with executive chairman and co-founder Sachin Bansal, after Flipkart and its investors struck a $2.6 billion deal with SoftBank Vision Fund, three people familiar with the matter said.
Since becoming Flipkart CEO on 10 January, Kalyan Krishnamurthy (Binny is group CEO) has been running the online retailer, with the Bansals almost entirely out of the day-to-day operations at the company.
But since May, starting with the removal of chief operating officer Nitin Seth, who was close to Krishnamurthy, Binny Bansal and Sachin Bansal have been reasserting themselves at Flipkart.
On Thursday, SoftBank Vision Fund agreed to invest roughly $1.4 billion in Flipkart and buy Flipkart shares worth $1.2-1.4 billion, most of them from Tiger Global Management, Flipkart’s largest investor.
Unlike Flipkart’s April fund raising, which had been led by Krishnamurthy and his former boss Lee Fixel, Tiger Global managing director and Flipkart board member, this time, Binny Bansal played a leading role in the deal negotiations with SoftBank, the three people cited above said.
Now, he’s set to play a more active role in Flipkart’s operations and strategy, the people added.
Flipkart is unlikely to make changes before its crucial annual sale, Big Billion Day (BBD), they said.
But a new management structure at Flipkart may be finalized after BBD, they said.
BBD is the most important sales event of the year for Flipkart and is held a few weeks before Diwali.
Currently, Krishnamurthy runs Flipkart; Binny Bansal heads the Flipkart Group, which includes fashion retailers Myntra and Jabong and mobile payments firm PhonePe; Sachin Bansal is the executive chairman.
“With SoftBank coming in, it’s obviously clear that the dynamics on the board are changing and Tiger’s influence will not be as definitive as it was before. The question of whether Kalyan will stay on or not is still premature, but I think it’s safe to say that Binny’s influence inside Flipkart is definitely on the upswing again, with the backing of SoftBank. I think he will have a lot of say in the running and the operations of Flipkart,” one of the three people cited above said.
Flipkart didn’t reply to an email seeking comment.
Mint reported on 11 July that the Bansals may return to more prominent roles at Flipkart if the SoftBank deal goes through.
In January, Tiger Global’s Fixel pushed through a leadership change at Flipkart, naming Krishnamurthy, his deputy at Tiger Global, as the company’s new CEO.
Krishnamurthy had led Flipkart’s efforts to win back market share from Amazon India since he returned to the company in June 2016 in the role of sales head.
Binny Bansal was moved to the role of group CEO just a year after he took the role from Sachin Bansal, who retained his position as executive chairman.
But starting May, the Bansals and Binny in particular have been playing more active roles. The Bansals orchestrated the removal of Seth in late May, the people cited above said.
Binny is acting as “mentor” at eKart and Sachin has taken up a similar position at Flipkart’s technology function, Mint reported on 11 July.
“As I’ve said earlier, the ball is in our court now. With razor-sharp execution, we must continue to transform commerce in India through technology and India-specific innovations,” Binny said in an email to employees on Thursday, announcing the SoftBank investment.
“As the leader of Indian e-commerce, the onus is on us to make its benefits reach the farthest corners of India,” he said.
Mint has reviewed a copy of the email.
Latest News »
- Apex Frozen Foods IPO subscribed 1.2 times till 2.45pm on Day 2
- Suresh Prabhu takes moral responsibility for train accidents, offers to quit
- Stop dumping of ‘ritualistic material’ into Ganga to keep river clean: NEERI
- Smartphones with 18:9 displays you can buy right now
- Global gold prices edge up on softer dollar, focus on Jackson Hole conference