Sachin Bansal likely to quit Flipkart if Walmart stake sale goes through
04 May 2018
The partnership of Flipkart founders Sachin Bansal and Binny Bansal to create a landmark startup could come to an end if the stake sale to Walmart goes through as executive chairman Sachin Bansal is likely to quit the board, sister newspapers The Times of India and The Economic Times separately reported today citing sources.
Sachin Bansal (left) with Flipkart co founder Binny BansalWalmart, the world's largest retail chain, is close to a deal to pick up a majority stake in India's most valued internet company. The Bansals collectively own around 10 per cent in Flipkart.
Sachin, who is also the longest-serving CEO of Flipkart, had no plans to sell any of his holdings until last week and was seeking a bigger role. He may look to start up again and also mentor other entrepreneurs, the sources told ET.
Flipkart did not respond to queries by TOI on the matter.
Sachin, 36 and Binny, 35, are not related. A batch apart in the Indian Institute of Technology-Delhi, they became friends as colleagues in Amazon before starting Flipkart in Bengaluru as an online bookstore in 2007 before going on to become the country's preeminent ecommerce company.
People familiar with the negotiations told TOI Walmart wants to retain only one of the two founders as they fine-tune the deal. "Sachin is most likely to leave and Binny will stay. Walmart has to make sure it buys off his shares, which is what is being worked out," said a source.
Even as Sachin's exit from Flipkart looks imminent, Walmart is holding on to Kalyan Krishnamurthy, the web retailer's present CEO, TOI’s sources said.
Walmart is on course to announce a $8-10 billion deal for a majority stake in Flipkart over the next few days.
"Flipkart's largest investor SoftBank and Bansal were aligned in pursuing a merger deal with Amazon, which didn't get the backing of the majority shareholders," said a person in the know. The latest developments suggest that there has been a divide at the top of Flipkart with the two co-founders taking opposite sides in deciding the future of India's most valued internet company.
Sachin's continuation could become untenable if the proposed deal with Walmart goes ahead as Walmart is seen to be keen on bringing Binny and Krishnamurthy (an ex-Tiger Global executive) on the company board, besides having at least three of their own nominees. Krishnamurthy, who took over as CEO from Binny in January last year, is seen to have turned around the firm after two sluggish years when it ceded market share to Amazon under the leadership of Sachin.
Sachin and Binny are currently on Flipkart’s 10-member board while Kalyan is not on the board, according to regulatory filings made by the company in Singapore.
While Binny Bansal is likely to sell about a tenth of his shares in Flipkart, it is not decided how much Sachin Bansal will sell. Sachin holds about 5.5 per cent stake in Flipkart which, if the deal happens, at a valuation of $20 billion will be worth over $1 billion.