From Uni­corns to One of their Own

Since May, at least 17 ex­ec­u­tives have left cos such as Flip­kart, Snapdeal, Ola, Zo­mato and Paytm to launch star­tups

The Economic Times - - Companies -

Sreer­adha D Basu & Shailesh Menon

Mum­bai: In­dia’s home­grown uni­corns are wit­ness­ing a steady stream of top ex­ec­u­tives quit­ting to launch their own ven­tures, un­daunted by cau­tious fund­ing sen­ti­ments, and most of th­ese en­trepreneurs are not look­ing to em­u­late their for­mer em­ploy­ers but to hit profit in a short time.

Since May last year, at least 17 se­nior ex­ec­u­tives have left com­pa­nies such as Flip­kart, Snapdeal, Ola, Zo­mato and Paytm to launch star­tups. Some of them are al­ready run­ning fast-grow­ing busi­nesses and a few even sold out their busi­ness to their for­mer em­ploy­ers.

“I think the time has now come for more boot­strapped, more cash­flow friendly mod­els,” said Srini­vas Murthy, who quit ecom­merce ma­jor Snapdeal as se­nior vice-pres­i­dent for mar­ket­ing in Jan­uary to take the en­trepreneurial plunge. He plans to set up tech-en­abled off­line stores but re­fuses to go into de­tails. “Mine isn’t a uni­corn idea by any stretch; but it’s one which can turn prof­itable soon, with very lit­tle in­vest­ment from VCs/ PEs,” Murthy said. Bhu­van Gupta, who quit as VPengi­neer­ing at Snapdeal in Novem­ber to co­found on­line mar­ket­place OfBusi­ness, said his startup al­ready has over 100 em­ploy­ees and is do­ing busi­ness across10 states cur­rently. “Peo­ple may call ecom­merce ‘a cash burn busi- ness’, but we’re al­ready cash pos­i­tive,” he said. “I al­ways wanted to do a startup and there’s al­ways an age and time when you can take such risk,” Gupta said. The num­ber of uni­corn ex­ec­u­tives tak­ing such risk is pos­si­bly at the high­est ever. In­dus­try ob­servers and an­a­lysts at­tribute this to a com­bi­na­tion of fac­tors – higher as­pi­ra­tion lev­els of in­di­vid­u­als, dif­fer­ences with the pro­moter CEO, cash in the bank, and a well-con­nected net­work.

“An in­creas­ing num­ber of pro­fes­sion­als are leav­ing uni­corns and the trend will con­tinue un­less the fund­ing sit­u­a­tion changes dras­ti­cally,” said Anuj Roy, part­ner, dig­i­tal prac­tice, at ex­ec­u­tive search firm Transearch. “The abil­ity to cre­ate im­pact, solve busi­ness prob­lems and higher as­pi­ra­tion lev­els of in­di­vid­u­als are the key driv­ers for th­ese pro­fes­sion­als to take an en­trepreneurial plunge,” he said. Ac­cord­ing to a new re­port by CB In­sights and KPMG, ven­ture cap­i­tal in­vest­ments in In­dia’s star­tups nearly halved to $1.5 bil­lion in fourth-quar­ter 2015 from the July-Septem­ber quar­ter.

Tech star­tups are now fo­cus­ing heav­ily on belt-tight­en­ing mea­sures: job cuts are be­com­ing in­creas­ingly com­mon, hir­ing num­bers are be­ing pared down, and salaries to new joi­nees are down from the ear­lier soar­ing lev­els. Bulge bracket salaries paid out to top brass are in­creas­ingly com­ing un­der the scan­ner.

“Some of th­ese peo­ple who’ve

Trad­ing Cushy Jobs for Star­tups

Srini­vas Murthy quit Snapdeal as se­nior VP for mar­ket­ing in Jan­uary to take the en­trepreneurial plunge ex­ited saw this com­ing,” said a top hon­cho at a lead­ing ecom­merce com­pany. “Oth­ers felt this was the right time to take ad­van­tage of a good idea and move out, given the big money, net­works and re­sources they had at their dis­posal,” he added.

Sev­eral se­nior ex­ec­u­tives have left top ecom­merce mar­ket­place Flip­kart in re­cent months to start their own ven­tures, in­clud­ing for­mer com­merce and ad­ver­tis­ing busi­ness head Mukesh Bansal, for­mer chief busi­ness of­fi­cer Ankit Nagori, for­mer se­nior di­rec­tor for re­tail Man­ish Kumar, and for­mer chief peo­ple of­fi­cer Mekin Ma­hesh­wari who is “on a jour­ney to im­pact ed­u­ca­tion in In­dia”. In end-March, Bansal and Nagori an­nounced that they are team­ing up to launch a health­care and fit­ness startup with $5 mil­lion of their own cash.

Ola saw exit of its pay­ments busi­ness head Rushil Goel and head of de­sign Su­nit Singh who is likely to launch a de­sign startup. Swami­nathan Seethara­man, ear­lier VP-engi­neer­ing at the taxi ag­gre­ga­tor, left to co­found a startup called Pianta.com.

Namita Gupta, ear­lier chief prod­uct of­fi­cer at Zo­mato, left to launch Airveda, which man­u­fac­tures per­son­alised air qual­ity mon­i­tors. “I wanted to start a bu- si­ness that is eco­nom­i­cally vi­able and has a so­cial ob­jec­tive,” she said. Priced at around .₹ 10,000 apiece, the prod­uct is be­ing lapped up by schools, ho­tels and hos­pi­tals. “The mar­ket is very big. Around 13 In­dian cities fea­ture in the list of most pol­luted places in the world. There are states (in In­dia) with just one air qual­ity mon­i­tor,” said Gupta, 37.

Then there are Rahul Chari, for­mer VP-engi­neer­ing at Flip­kart, and Sameer Nigam, ear­lier SVPengi­neer­ing at Flip­kart, who started up to­gether and then sold out to their for­mer em­ployer. In April, their pay­ments startup PhonePe was ac­quired by Flip­kart in un­der six months of the duo leav­ing the com­pany. It is ex­pected to give an edge to Flip­kart as it looks to build a pay­ment busi­ness to catch up with Snapdeal and PayTm.

Aftab Mal­ho­tra, co­founder at Lon­don-based men­tor­ing plat­form GrowthEn­abler, said such things will in­creas­ingly hap­pen “as se­nior ex­ec­u­tives who know the busi­ness in and out exit the com­pany”. “They will come up with a busi­ness plan that caters to the gap the com­pany wants to ful­fil. And if they left the for­mer or­gan­i­sa­tion on an am­i­ca­ble note af­ter prov­ing them­selves, it will be eas­ier,” he said.

Vinod Mu­rali, MD of ven­ture debt provider In­noven Cap­i­tal, said, “There are founders who even fund such as­pi­ra­tions of their top em­ploy­ees. It’s their way of giv­ing back to the startup ecosys­tem.”

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