Why Bansal may get a big­ger stake in Ola than what $100 m war­rants

The Hindu Business Line - - NEWS - SANGEETHA CHENGAPPA

Flip­kart co-founder Sachin Bansal, who is in ad­vanced talks to pump in $100 mil­lion in ride-hail­ing app Ola, is un­der­stood to be ne­go­ti­at­ing to get a larger stake than his in­vest­ment is likely to get him.

He is also keen on get­ting a seat on the Ola board, which in all prob­a­bil­ity he is likely to get. The Ola board cur­rently has nine mem­bers in­clud­ing the founders Bhav­ish Ag­gar­wal and Ankit Bhati.

Ac­cord­ing to sources, Bansal who led the big­gest buy­out yet in the his­tory of In­dia’s fledg­ling e-com­merce sec­tor when he suc­cess­fully sold a 77 per cent stake in Flip­kart to Wal­mart for $16 bil­lion, is look­ing to get a 5-7 per cent stake for his in­vest­ment in Ola, which is more than the 2-3 per cent that he will get in the nor­mal course.

This is pos­si­ble be­cause in Sachin Bansal

ad­di­tion to the amount of cap­i­tal that an in­di­vid­ual in­vests in his per­sonal ca­pac­ity, an ex­tra stake can also be given out for in­tan­gi­ble as­sets like the in­tel­lec­tual prop­erty that he/she brings to the ta­ble.

Strate­gic value

“The strate­gic value that the in­di­vid­ual in­vestor brings in with his IP, ex­pe­ri­ence, his in­sights into what is likely to work and the net­work of stake­hold­ers that he has first­hand ac­cess to, al­though in­tan­gi­ble, can be quan­ti­fied in dollar terms that can then be trans­lated to a cer­tain per­cent­age of stake that can be given to him, in ad­di­tion to the stake that his in­vest­ment gets him,” a top ex­ec­u­tive from an early-to-late stage VC firm told Busi­nessLine.

‘Murthy of e-comm’

“Bansal is the Naranayana Murthy of e-com­merce, a vi­sion­ary who had the drive, pas­sion and be­lief to suc­ceed in get­ting peo­ple to shop on­line at a time when e-com­merce it­self was new to Indians,” said Sanchit Vir Go­gia, Chief An­a­lyst, Grey­hound Re­search.

“He made his­tory when he suc­ceeded in get­ting Wal­mart to in­vest $16 bil­lion for a ma­jor­ity stake in Flip­kart. Ola's in­vestors have ev­ery­thing to gain by giv­ing him a seat on the board, as the com­pany's val­u­a­tion will most def­i­nitely go up with Sachin on board as a strate­gic ad­vi­sor.”

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