Uber. Airbnb. LinkedIn. YouTube. Tesla Motors. Yelp. All seemingly large, yet primarily unrelated companies. What you may not know, though, is the uncommon thread connecting all these multi-billion dollar companies – they were all advised, funded, or founded by former PayPal employees, better known in today’s startup terminology as the “PayPal Mafia.” Today, we present a similar tale, of how a class of entrepreneurial legends and an entire ecosystem arose from who was once called India’s glorified bookseller, Flipkart and the various entrepreneurs, investors and startups it sprouted, The Flipkart Mafia.
The Mafia, the Mob, the Syndicate or, like the Italians like to call them, La Cosa Nostra (Our Thing), is the name of a secret, a criminal organisation which evolved in mid-19th century Sicily. Today, it has come to define a group of people wielding substantial (political, military, or economic) power for their own benefit.
Back in 2002, PayPal was acquired by eBay for $1.5 Bn and was touted as a “worthwhile investment for eBay.” One of the major reasons for the PayPal deal was eBay’s expedition to hit the $3 Bn revenue mark by 2005. Interestingly, it touched $4.5 Bn in revenues for the year 2005.
Update [March 2018]: Flipkart Plans 4.5 Mn Sq Ft State-Of-The-Art Logistics Park In Bengaluru
But analysts had mixed opinions on the acquisition. “This is good news for eBay, but bad news for PayPal,” opined Gwenn Bezard, an analyst with Celent Communications at that time. According to him, PayPal’s shareholders would have benefited more if the company remained independent. The criticism did not die down with time either as Eric Jackson, a Forbes contributor, termed the deal as “the worst tech decision in the last 10 years.” According to him, PayPal left too much value on the table by selling early.
However, the impact of a particular deal can’t be judged by the deal size or the value founders or investors get, but by how it impacted and helped in revitalising the overall ecosystem around it.
There has been enough written on the non-probabilistic number of prominent modern Goliaths that arose from the ashes of Paypal. There are articles aplenty on the web which talk about how PayPal changed the face of Silicon Valley. However, in the context of India’s nascent ecosystem, it’s much harder to trace the origin stories of today’s entrepreneurs, investors and startups. Today we delve into one such company, the poster boy of India’s startup ecosystem and currently the highest valued Indian tech company, Flipkart and the so-called Flipkart Mafia!