Bansal out, group CEO position may become history at Flipkart

BENGALURU: Walmart Inc.-controlled Flipkart, which saw its co-founder and group chief executive Binny Bansal resign earlier this week over an investigation into “personal misconduct”, may abolish the position of group CEO and retain the new structure it put in place after Bansal’s exit, said two people aware of the developments.

A key factor driving the decision is the likely spinning-off of Flipkart’s payments arm Phonepe into an independent company, said the people cited above, requesting anonymity. Phonepe will remain majorityowned by Walmart but will raise funds from other investors, the people said. Both Tiger Global and Tencent, which are shareholders in Flipkart, have expressed interest in funding Phonepe, they said. Phonepe will seek at least one external investor to secure the large amount of capital it needs to take on Paytm, the person added.

As part of the new structure, Phonepe co-founder and CEO Sameer Nigam is reporting directly to the board of the Flipkart group—like Kalyan Krishnamurthy, CEO of Flipkart.

“Phonepe wants to retain its independence from the group and wants to have the option of raising funds from outside strategic investors. Walmart has given them the green light to do so,” said one of the two people cited above. Mint had first reported on October 1 that Phonepe may raise funds separately. Mint had also reported that if Phonepe gets more strategic investors outside Walmart, it may look to raise as much as $1 billion next year.

As part of the new structure, Myntra and Jabong will continue to retain their status as independent platforms within the group, despite reporting into Krishnamurthy, and won’t be merged into Flipkart’s fashion business for now, the people mentioned above said. Walmart wants to retain key leaders such as Ananth Narayanan, CEO of Myntra and Jabong, and the success of Myntra as an independent brand convinced Walmart to keep the firm independent for now.

While Flipkart will do away with the title and position of group CEO, Krishnamurthy is internally being seen as the de facto head of the entire group, given his new, additional responsibilities of overseeing Myntra and Jabong, the people said.