Bengaluru: A number of large and emerging businesses in India’s booming startup ecosystem, including cab-hailing service Ola and online food ordering and delivery startup Swiggy, are following in the footsteps of Flipkart as they explore setting up a group company structure to enhance valuations.

Over the past five years, some of the startups, including Ola (ANI Technologies Pvt. Ltd) and Paytm (One97 Communications Ltd), have attempted to either acquire or build big businesses with strong brand recall, in an attempt to convince investors to value them at a higher price, arguing that the sum of their parts is greater than the whole.

And for several of them, Flipkart offered the blueprint that they could replicate, entrepreneurs and investors told Mint. “If you have multiple large businesses with their own CEO (chief executive officer), then a group structure does make sense (like Flipkart, Myntra and PhonePe)," said Anand Daniel, a partner at venture capital firm Accel Partners India.

In the biggest e-commerce deal globally, Flipkart in May agreed to sell 77% of the company to Walmart Inc. for $17 billion, valuing the startup at $21 billion.

Flipkart’s valuation was boosted by its units, fashion retailer Myntra and payments app PhonePe.

Myntra comprised $5.5-6.5 billion of the $21 billion value, while PhonePe was valued at $1-1.5 billion, Mint reported on 9 May.

The group company structure allowed Flipkart to improve its overall valuation and give enough management focus to each business, which were independent of the others.

And as Mint reported first on 28 May, even the likes of Ola are starting to follow a similar model. Ola is studying its organizational structure wherein its leasing business; the recently acquired Foodpanda; Ola Money and its international and electric vehicle units all operate as separate, independent businesses.

According to two people aware of the matter, Ola may eventually adopt a holding company structure similar to that of Flipkart to boost the cab-hailing company’s valuation and improve the management of its businesses.

“From a valuation and scale perspective, it does make a lot of sense for startups to adopt such structures and create independent businesses which are run by their own CEOs. And that is starting to happen with increasing regularity at large Indian startups," said a partner at a domestic venture capital firm requesting anonymity.

Others such as Swiggy, which was the quickest local startup to rack up a billion-dollar valuation, are starting to think of similar structures as they scale up, rapidly increasing complexity of their businesses.

To be sure, Bengaluru-based Swiggy has not yet adopted a group structure and its offerings, such as Swiggy Pop and Swiggy Access, reside under the broader umbrella of the company. But as the company expands, Swiggy may adopt a group-like structure with separate legal entities for all its offerings, akin to those of Flipkart and Ola.

Swiggy co-founder and chief executive officer Sriharsha Majety said the startup, which recently hired Vivek Sunder as its chief operating officer, is currently mulling on the kind of structure that it wants to put in place eventually.

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“We’re mulling over the structure right now. The initiatives that we are launching right now like Pop, Access, etc are all a part of the Swiggy umbrella, but as complexity increases, as the need to be more agile increases, we may think about it (a group structure)," said Majety. “I think there are merits to thinking about it like that, building an ecosystem for more and more experimentation to happen, so we’ll need to be watchful of that."