“...From bootstrapping Ola when Indian consumer tech was still taking baby steps to braving regulatory hurdles and fighting off foreign competitors, Bhavish has driven around the block a few times... This time, the wishes of a billion Indians, mine included, are riding in his cab," wrote Sachin Bansal for Bhavish Aggarwal in Time magazine earlier this year.
But it is not only his wishes, but also his capital which could soon be riding in Aggarwal’s cabs, if reports are anything to go by. Bansal, who co-founded Flipkart, sold his entire stake to Walmart, scripting one of the largest, real home-grown venture capital backed tech exit in actual cash realizations. The 37-year-old made over a billion dollars in an instance of unprecedented wealth creation and is now mulling cutting a cheque of $100 million for Ola. The deal, if it happens, is significant.
It is almost like the coming together of two minds who think alike. Both Aggarwal and Bansal have, in the past, vociferously voiced their concerns in their fight against foreign-origin rivals, urging the government to design policies which will favour home-grown companies.
Both were on a stage at a technology conference some time back and spoke in one voice seeking protectionist support from the government, recalls an investor. “A selfie swarm follows them. They crack jokes but at the same time also drive home their points. They are like the Elvis of start-up business," the investor tells me. Bansal who has spotted Ola to begin his second innings as an investor, in all likelihood, will join the board and his influence should be considered more strategic.
Timing is important, too. It is no secret that Aggarwal is at loggerheads with his two most significant backers—Tiger Global and SoftBank Group Corp.. According to a Mint report, Aggarwal, locked in a boardroom battle with his investors, is strengthening his legal rights to maintain control of his company. Such trends can set alarm bells ringing. Plus, this is a tough one and can turn out to be a lonely battle just given how SoftBank is killing venture capital with its mammoth Vision Fund. Ola would need SoftBank on its side more than SoftBank needs Ola, especially given that a late-stage firm like Ola has not really raised a huge funding round in the last one year.
“We all have had bullies, and you need someone of your own to stand up," an investor tells me.
Even Uber could not hold up against SoftBank. “Rather than having their capital cannon facing me, I’d rather have their capital cannon behind me," Uber CEO Dara Khosrowshahi has said.
The situation is further compounded with competitors becoming strange bedfellows. SoftBank has significant shareholding in both Uber and Ola. And Uber has made its intention clear that it is here to stay in India for a long haul, unlike some other markets which they have exited.
Bansal can help Aggarwal navigate these relationships and also help him manage the expectations of its stakeholders. He has gone through a huge learning curve with such similar situations—huge fund raises, dealing with influential investors in competing companies, standing up to a global internet giant and so on. He finally got upstaged by his own investors and did not necessarily meet an outcome he would have desired.
With a first-hand experience like this, Bansal can transcend this fundamental tension which Noam Wasserman in Harvard Business Review calls the “rich" versus “king" trade-offs. The “rich" options enable the company to become more valuable but sideline the founder. The “king" choices allow the founder to retain control of decision making—but often only by building a less valuable company.
Finally, the key learning that Bansal, like most other entrepreneurs has had is that success is random and you can’t plan it. One theme that repeats again and again: somewhere, at some point, you get lucky. They experienced a serendipitous encounter, a moment of insight, or an unplanned culmination of events where fate turned their way. Be it their first investor, Tiger Global, finding them via a call at their customer call service centre, or SoftBank choosing them over Snapdeal, or Walmart using Flipkart as its beachhead in India in its fight against Amazon. This is what Frans Johansson talks about in his book The Click Moment. Getting Sachin on board could be that moment for Aggarwal.
Shrija Agrawal is Mint’s deals editor. Due Diligence will cover issues in India’s venture capital, private equity and deals space.