This article is part of Inc42’s special year-end series — 2018 In Review — in which we will refresh your memory on the major developments in the Indian startup ecosystem and their impact on various stakeholders — from entrepreneurs to investors. Find more stories from this series here.
This year, the Indian startup ecosystem took it upon itself to make and break its own records — from big acquisitions and even bigger exits to billion-dollar fundings and high-profile controversies. While almost every deal and startup move worth its salt makes it to the headlines, what we often forget that behind every successful (or failed) deal or startup, there is a human, more likely, a bunch of humans.
We’re talking about entrepreneurs, investors, employees, and others who pour their hearts, minds, and souls into nurturing an innovative idea through tough times and good to build a solution that adds value to the world, a startup that matters.
The year gone by was about many adieus and new beginnings — a number of well-known entrepreneurs said goodbye to their creations, closing the doors on years of hard work and starting afresh. While some left of their own accord, others had no choice but to leave.
On the other hand, we saw many new senior-level appointments in the Indian units of international companies such as Facebook, WhatsApp, and SoftBank. While some appointed their Indian representatives to have their presence felt deeper in the country, others were given an ultimatum to do so by the Centre, with India taking a tough stand on issues such as data localisation, data privacy, and fake news.
As the year come close to a close, we take a look back at the entries and exits that mattered in the Indian startup ecosystem — the biggest movers and shakers of 2018!
Flipkart-Walmart: You Say Goodbye, I Say Hello
“Sometimes life is about risking everything for a dream no one can see but you.” — Anonymous
The Flipkart founders — Sachin Bansal and Binny Bansal — probably took inspiration from the above quote in all those years of trials and tribulations that their dream — Flipkart — went through.
All’s well that ends well, they say. And it seemed like a fairytale ending to the Flipkart tale when it was acquired for $16 Bn by US retail giant Walmart in May this year.
Except that it was not. There was one last twist in the tale. In one of the most controversial and emotional developments of the year, the ecommerce startup was left founder-less in the aftermath of its much-hyped acquisition. The company also saw several other layoffs and exits.
One of the Bansals knew his fate even as the founders were signing off their brainchild to Walmart. Sachin Bansal’s exit was a written in the fine print — Walmart had said it wanted only one founder on board.
But it was Binny Bansal’s ouster (in the garb of a resignation) that shocked the ecosystem. Binny got runout even after reaching the crease, although the personal misconduct allegations on which he resigned were never proven.
With the cofounders out, Flipkart, along with its new parent Walmart, is busy reshuffling its senior leadership team. Its fashion subsidiaries, Myntra and Jabong, have already been merged, thereby signalling massive layoffs. Speculation is rife around the exit of Myntra chief Ananth Narayanan as well. Just recently, a big shuffle was carried out in the top management, including the COO and the heads of different departments at Flipkart and Myntra.
Looks like Flipkart CEO Kalyan Krishnamurthy, who’s now handling things at the group level after Binny’s exit, is the only old sailor left sailing on the Flipkart boat since Walmart became captain. Tiger Global’s Lee Fixel’s love keeping him afloat?
Zomato Bids Adieu To Cofounder Pankaj Chaddah
While the exit of Sachin Bansal and Binny Bansal sent shockwaves in the ecosystem and sparked off several conspiracy theories, homegrown foodtech unicorn Zomato bid a thankful and heartfelt adieu to its cofounder Pankaj Chaddah.
However, Zomato employees were surprised by his sudden and surprising exit. In a blog post, the company said that Chaddah would be stepping down from his role from March 31 to focus on a new chapter in his personal life. His Linkedin profile says he’s “on a break right now”.
Pankaj, who started his Zomato journey along with Deepinder Goyal in 2008, sent a farewell letter to the employees in which he said that he had been considering the move for a long time but didn’t want to leave the company when it was facing troubles — referring to the 2015-16 period when Zomato suffered huge losses.
The decade old company’s annual GMV crossed $1 Bn this year and offers its services to over 100 cities. Zomato also added two more acquisitions to its kitty — Bengaluru-based TongueStun Food and Lucknow-based drone startup TechEagle Innovation and will explore drone-based food delivery. The company also recorded 40% growth in its revenues for FY18 and continues to multiply its daily orders drastically.
Is Ajit Mohan The Friend Facebook Needed In India?
Facebook has never needed to invest in PR exercises to stay in the news, ever. However, in 2018, the company had to do quite a bit of firefighting and damage control (read PR activities) to protect itself from the fire which threatened to burn to ashes its years-old goody-two-shoes image.
It all started with the Facebook-Cambridge Analytica scandal, arguably the biggest data leak in the world. Facebook exposed data on up to 87 Mn Facebook users to research firm Cambridge Analytica, which was working on US President Donald Trump’s campaign. The issue flared up in India when it was revealed that of the 87 Mn Facebook users whose data was compromised, 562K Indians were “potentially affected”.
From then on, it was only downhill in India. Since March 2018, Facebook has been fielding one crisis after another and faced severe criticism for its data security lapses. It has received multiple notices from the Indian government, seeking the details of the data compromised of 5.62 Lakh Indians.
Ajit Mohan Signs On Risky Business With Facebook India
One of the steps Facebook took to sweeten its relationship with the Indian government was appointing Hotstar CEO Ajit Mohan as its managing director and vice-president in India. Mohan filled the empty chair of Umang Bedi, who left Facebook India in October 2017.
The appointment is also notable because it comes with a high amount of threat of personal liability in case of untoward incidents. An inter-ministerial committee has made a recommendation that the India heads of the global internet and social media giants be made to face criminal proceedings in case their platforms are used for unethical campaigns or to spread fake news that leads to lynching and riots.
However, Mohan, who is set to join the company in early 2019, seems to be ready to brave the storm Facebook is caught in. At Facebook India, he will be aligning teams and driving Facebook’s overall strategy in India. Prior to Hotstar, Mohan worked as a management consultant in New York for the US-based management consulting firm McKinsey & Company.
Anand Chandrasekaran Calls It Quits
Even as Facebook was dealing with data privacy concerns, it bade adieu to Anand Chandrasekaran, who was responsible for leading the company’s India strategy for products, technologies, and functions in November. He spent two years at the company.
Chandrasekaran, who joined in 2016 as Facebook India Director for Platform/Product Partnerships, was initially responsible for working with Messenger. However, at the time of stepping down from his position, he was responsible for WhatsApp operations, especially in India.
He has earlier served as the chief product officer of ecommerce platform Snapdeal and is now planning to look at some opportunities in the San Francisco’s Bay Area. Chandrasekaran has also made a name for himself as an angel investor where he is focused on supporting early-stage startups across sectors, including consumer internet, P2P and B2C marketplaces, fintech, SaaS, and hardware.
WhatsApp Gets Centre’s Message, Appoints India Head
That was not the end of Facebook’s troubles in India. This past year, WhatsApp, the Facebook-owned messaging platform, was also in the eye of the storm.
With great power comes great responsibility. And with a user base as large as 200 Mn, WhatsApp is certainly powerful in India. But has it been responsible? Well, the Indian government has had to lick it into shape.
To start with, WhatsApp increasingly emerged as a platform on which fake news proliferated, leading in rioting and even loss of lives in India. According to reports, nearly 31 people were killed across Assam, Maharashtra, Karnataka, Tripura, and West Bengal.
On July 4, the Indian government asked WhatsApp to immediately stop the spread of irresponsible and explosive messages on its platform. However, WhatsApp’s response seemed a bit casual to the government — limiting the number of forwarded messages per user per day to five and radio campaigns on fake news.
After dragging its feet on complying with the Indian government’s demands, WhatsApp finally met four of the major ones — it set up an office in India, appointed a grievance officer and an India team (including an India head), and tried to address fake news concerns by launching the ‘Forwards’ label to help users identify forwarded messages.
Among other measures, the company has also rolled out a radio campaign to raise awareness about spread of fake news and committed $1 Mn for research on misuse of WhatsApp for spread of misinformation.
All with a view to get on the right side of the Indian government and pave the way for the launch of its payments services — WhatsApp Pay — which is stuck in a logjam and is awaiting the approval of the RBI. But it is unlikely to get it until it complies with the government’s data localisation directive.
The company started setting up its India team with the appointment of Komal Lahiri as the grievance officer for WhatsApp in India. It followed it up with the recent appointment of Ezetap’s former CEO Abhijit Bose as WhatsApp India head. Bose, who had founded B2B payments platform Ezetap in 2011, is expected to take up his new role from early next year.
Even as it sorted out its plans for India, the company bade adieu to its chief business officer Neeraj Arora who quit from his position after a seven-year stint at the company. The announcement came as a shock as Arora was one of the leading contenders for the position of WhatsApp CEO after the exit of Jan Koum.
Sights Set On India, SoftBank Appoints Sumer Juneja As Country Head
After investing billions of dollars in Indian startups and catapulting five startups to the unicorn club in 2018, Japanese conglomerate SoftBank has been exploring more avenues for investments in ecommerce, logistics, and food technology as it plans to make several new bets in the country.
Considering its deep interest in strengthening its position in India, it only made sense for SoftBank to appoint an India representative, which it did in late November. SoftBank has appointed Sumer Juneja as its country head for India. The appointment has also prompted the plans to open an office in Mumbai where Juneja will lead the operations.
Juneja was previously working as a partner with Norwest Venture Partners in Mumbai, where he was actively involved in the company’s investment in Swiggy, Quikr and the National Stock Exchange.
Prior to Norwest, Juneja worked with Goldman Sachs in London and Hong Kong as an investment banking analyst, driving several M&A processes such as financial analysis, due diligence, and public and private buy-side and sell-side transactions.
Another interesting addition to SoftBank group came from India itself, as ex-Facebook India MD Kirthiga Reddy joined SoftBank Investment Advisers with an aim to enable the next stage of the information revolution. She will be based out of the SoftBank’s San Carlos, Silicon Valley office.
Capital G India Head Kaushik Anand Joins A91 Partners
With the venture capital action really heating up this year, there have been a few significant senior executive moves in the space. US-based venture capital company Capital G lost it’s India head, Kaushik Anand, to Bengaluru-based A91 Partners. Anand stepped down from his position at the Alphabet Inc-owned venture fund in November.
A91 Partners is a yet-to-be-launched startup fund, floated by two former senior executives from Sequoia Capital — VT Bharadwaj and Gautam Mago.
Anand had joined CapitalG, formerly known as Google Capital, in 2015 where he was responsible for leading investments in auto classified portal CarDekho, edtech startup Cuemath, and fintech startup Aye Finance.
Anand, who is expected to join his new position from early 2019, will mainly focus on technology, healthcare, and the financial services sectors at A91.
It’s not just the Indian startup ecosystem that saw the exit of founders of successful startups that have been acquired by bigger companies. The trend was visible globally as well.
In April, WhatsApp cofounder Jan Koum left the Facebook-owned company, joining his partner Brian Acton, who left in September 2017. Both the founders had concerns about Facebook’s lax approach to data privacy, and with good reason, given the mess, Facebook has landed itself in.
Also, Instagram founders Kevin Systrom and Mike Krieger announced their plans to exit from the photo-sharing platform in September without giving any specific reasons. Mark Zuckerberg, maybe? According to reports, there were differences between Instagram and Facebook’s leadership regarding the platform’s autonomy.
All in all, it was a year as any other — exits mired in controversies and new appointments weighed down with expectations, peppered with bittersweet departures of entrepreneurs from their companies. And most of them left behind a part of themselves — in the sense of the skills, knowledge, or spirit they infused into their teams — to act as a force in times to come.
But endings are also about new beginnings. And what better time than the new year?
To new beginnings, then!
This article was written by Shreya Ganguly and Bhumika Khatri and edited by Prakriti Singhania.