Flipkart founders Sachin Bansal and Binny Bansal are out of a global billionaires list due to successive devaluation of their e-commerce company by different funding agencies.
Sachin Bansal and Binny Bansal are amongst the 31 Indian billionaires who are out of the Hurun Global Rich-Indian billionaires list. Reliance Industries Chairman Mukesh Ambani, meanwhile, topped the Hurun Global Rich-Indian billionaires list for 2017 which identified 132 Indians or Indian origin billionaires with US$1bn or more. Patanjali's Acharya Balakrishna ranked 28th on the list.
The past year was turbulent for Flipkart which faced strong competition from Snapdeal and US e-retail giant Amazon. Below are some key developments in Flipkart and challenges Sachin Bansal and Binny Bansal faced:
- Last year, there was a mass exodus of senior leadership from Flipkart, followed by a quest on how to fill the gap and what the new leadership structure should be like. It took 3-4 months for Flipkart to fix the internal organization and associated strategies and they practically lost this time to do anything significant around growth.
- In January this year, Binny Bansal was elevated to the role of group CE, while Kalyan Krishnamurthy was put in charge in charge of day to day operational decisions as the CEO. Sachin Bansal, whose focus was on growth was made the executive chairman.
- The appointment of Kalyan Krishnamurthy was seen as a big investor - Tiger Global - flexing its muscles in the management of Flipkart. Till last year, the founders, Sachin Bansal and Binny Bansal had a largely free hand. However, last year things changed somewhat.
- On November 28, 2016 Morgan Stanley marked down Flipkart's valuation - for the fourth time in a year - to $5.6 billion. Last year, Flipkart was devalued by Morgan Stanley at about $5.5 billion compared to the $15.2 billion it was valued at in May 2015.
- The buzz was that the valuations of Flipkart was dropped, as Amazon India showed an insatiable appetite for spending money to expand, investors in Flipkart were becoming more cautious.
"India had a tough year because of disruptive government policies such as demonetisation drive. However, on a long term perspective, we do believe that such transparent currency economics will have a positive impact for the entrepreneurs", said Anas Rahman Junaid, Managing Director and Chief Researcher, Hurun Report India.