It looks like not everyone has been ecstatic about the Flipkart-Walmart deal. On the deal front, Flipkart has already said goodbye to Sachin Bansal and its investors, all the while its employees are looking forward to the ESOPs with Walmart’s filmy-yet-timely entry into the Indian ecommerce space with Flipkart.
However, in all this frenzy over the deal, the Indian ecommerce industry also witnessed some conspiracy theory surfacing. While Sachin Bansal wrote his goodbye post on Facebook and equally sentimental post also came from Binny Bansal and the Flipsters but a Livemint report has claimed that Sachin Bansal had to forcefully exit from the company.
The conspiracy theory gets a head start with a look at the short non-compete clause with Walmart. The report claims that following the clause, Sachin Bansal will be restricted from starting any business that directly or indirectly competes with Flipkart for 18 months from his departure from Flipkart. He will also not be able to make any investments or take a management role in any competing businesses for the next 36 months.
While the beginning of Flipkart has been a subject of inspiration for many, the real boost and slump came in 2014. On the slump side, decisions to become app-only by Sachin Bansal and out-of-stock scenarios during Flipkart sale had brought major downside to the company.
Sachin Bansal had also decided that Flipkart didn’t need advertising — if its product/platform was good enough, people would anyway flock to it.
However, the boost was given by fundings when in July 2014, Flipkart raised $1 Bn at a valuation of $7 Bn. Flipkart had become a clear market leader, achieved the status of a unicorn and attracted lots of capital.
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With success stories and funding boosts from the investors, “Sachin Bansal’s profile was elevated overnight.” Soon, Binny Bansal and Sachin Bansal became billionaires and Flipkart soared to success.
The report has quoted former and current Flipkart executives, saying that after that $1 Bn fundraise, Sachin Bansal became a different man. He was well-liked and respected inside Flipkart but he also had a mercurial personality, prone to mood swings and tantrums.
“With that funding, his behaviour became so erratic that he alienated people who had worked with him for years.” He also forced out leaders who had helped build Flipkart and became aloof and hostile to people he worked with.
As a leader of a disruptive startup, he believed he needed to adopt the behaviour of a visionary who does unpredictable things and believed that Flipkart had to be transformed for it to become a $100 Bn company.
Sachin’s relationship with Binny also soured. Both wanted Mukesh Bansal, co-founder of Myntra, which had been acquired by Flipkart in 2014, to play a bigger role. But Sachin started working more closely with Mukesh than Binny.
In 2015-16, “Sachin had a lot of big ideas but he was unable to execute any of them. And many of these ideas like the app-only experiment and the shift to marketplace just didn’t make sense. He lost credibility with the investors and also with Flipkart executives,” another former Flipkart executive said.
After being pushed out as its CEO in 2016, Sachin Bansal lost more credibility in day-to-day operations post Tiger Global Management installed Kalyan Krishnamurthy as Flipkart’s CEO in January 2017.
Amid this, without direct charge of any function, Sachin Bansal started working with the company’s technology executives. He led Flipkart’s “push toward building artificial intelligence capabilities and its effort to build a multi-category brand, Billion”.
The report added that during the discussions with Walmart, Sachin Bansal was an integral part and was confident he will get a bigger role at Flipkart after the sale.
He wanted stronger rights and guarantees that he would have a lot more say in Flipkart’s operations, however, this was strongly refuted by Krishnamurthy, whom Walmart wanted to retain as CEO.
“Dealing with Bansal’s demands would have delayed the deal. Tiger Global’s Fixel sided with Krishnamurthy and, suddenly, Sachin Bansal found himself cut out.”
Another major fallout was Binny Bansal and Sachin Bansal fighting for themselves, not as a team. Binny Bansal is continuing as Flipkart group CEO.
“Since the start of Flipkart, his life has revolved around it. For him, every conversation is about Flipkart and everything is about Flipkart. It is probably a blessing in disguise that he is leaving. He is not someone who will quit or retire this early. He will start his new journey and probably get on to the next big thing,” said Abhishek Goyal, co-founder of Tracxn and an early investor in Flipkart.