Bansals’ exit paves way for quick succession plan
Bengaluru/ New Delhi, 13 November
When the contours of a deal with Walmart was still unfolding, one thing was getting clear – that none of the co-founders of Flipkart are going to remain in the long term.
It is a different story that Sachin Bansal had to leave first rather unceremoniously as it was cited that the US retail giant couldn’t find an appropriate role for him.
The Bentonville-headquartered company, however, preferred to retain Binny Bansal, the other co-founder, giving him an additional position of chairman of the board in addition to the group CEO’s role he was already discharging, as he was seen as a key “execution man”.
The other reason also is that the US retail giant did not want to be seen as just another global investor in India, given that the deal required to scale several legal and regulatory hurdles in order to be closed. A cofounder and Indian entrepreneur at the helm was beneficial for the company. However, with Binny now deciding to exit rather unceremoniously with allegations of ‘serious personal misconduct’, dominance of the Bansals in the company they founded some 11 years ago has ended.
The allegations of personal misconduct against Binny aside, both the Bansals are still considered the poster boys of Indian ecommerce, by giving shape to an industry in the country when internet commerce was but anyone’s imagination here.
Both alumnus of IIT-Delhi, Sachin and Binny co-founded Flipkart in 2007 after a stint at Amazon in the US. The duo started the company from a small flat in Koramangala, Bengaluru, delivering books to customers ordering them online. It is said that in the initial days, the two would take turns to deliver the consignments to customers on a scooter.
Both of them also brought different skills to the table. While Binny was more of an ‘operations guy’, Sachin dreamed up the big ideas. They lied low and kept on building the business brick by brick until they suddenly hogged the limelight by bringing on board marquee investors, all the way from Accel Partners and SAIF Partners to global biggies like Tiger Global Management and sovereign funds from Singapore and Qatar.
Binny, who was the chief operating officer of Flipkart till 2015, built the company’s logistics network and a well-oiled supply chain, regarded as the backbone of an ecommerce enterprises. He created E-Kart, Flipkart’s captive delivery arm, back in 2010 and grew it to its current scale.
However, from operations and executions, Binny first emerged out of the shadows in January 2016 when he took over the position of CEO from co-founder Sachin, who was forced to step down from the post after Flipkart’s growth hit a bump.
However, only a year later, he was pushed out to make space for Kalyan Krishnamurthy, a Tiger Global executive with a proven track record, to help Flipkart compete with Amazon. Binny, like his partner Sachin, was sidelined and had no say in the day-to-day running of the company.
Binny’s exit from the company is now expected to help Walmart hasten the succession plan at Flipkart much faster. This is something the company has been talking about for some time, but the resignation of Binny is now expected to hasten the process. The retail giant had been preparing and grooming Kalyan Krishnamurthy to be the group CEO as well as the main point man ever since the company bought 77 per cent stake in Flipkart.
Sources in the know say that while the company may consider naming one of its representatives in the Flipkart board as the chairman, Krishnamurthy for all practical purposes will now lead most of the business with both Myntra and Jabong CEOs now reporting to him.