A few days later, Lee emailed Flipkart’s customer service team again. Feeling intrigued, the Bansals decided to call this persistent man to ascertain once and for all if he was indeed a prankster. But they couldn’t even make the call because their phone connection lacked an international calling feature. His pursuit still fruitless, Lee now asked Deep Kalra, founder and CEO of MakeMyTrip, to speak with the Bansals on his behalf. Deep was a well-known and respected entrepreneur and the Bansals saw him as a mentor of sorts. Only after Deep spoke to them did they start taking Lee seriously. In early September, they spoke to Lee for the first time. After a few more phone conversations, Lee flew to Bangalore to meet the Bansals. Immediately he was impressed. Sachin and Binny were young but Lee could see that they were very sharp and thoughtful about payments, logistics, and various other matters that needed to be sorted out in order for e-commerce to expand in India. The Bansals’ obsession with pleasing customers pleased Lee, too; he had seen Amazon apply that principle to great effect in the US. His conversation with the Bansals turned out to be very different from the ones he had had with other Indian e-commerce startups. Not only were the Bansals far more ambitious, they also seemed to know how their vision could be accomplished.
In later years, the speed at which Lee made investment decisions would become legendary. He displayed the first instance of this speed when he decided to invest in Flipkart. Less than six weeks after his first call with the Bansals, Lee made his offer. The amount was astronomical: $9 million. Flipkart’s first round of funding from Accel had come after more than a year of talks, and after the company had been passed up by every other venture capitalist. Now, just a few months after Accel finally agreed to put up a grand sum of $1 million, and that too in tranches, Flipkart was on the cusp of securing a funding that was ten times as large and negotiated in less than forty days.
The talks with Tiger Global moved so fast that Flipkart had by then not even received all the Accel tranches. Accel would now have to renegotiate its investment terms. In October 2009, Flipkart signed a term sheet, also known as a preliminary investment agreement, with Tiger Global. In early 2010, after completing all financial diligence, the deal was signed. The total investment came up to $10 million, of which $9 million was contributed by Tiger Global and $1 million by Accel. Flipkart’s valuation soared to nearly $40 million.4
Tiger Global’s investment was just the vindication for which Sachin and Binny had been so desperate. Finally they had found an investor who understood their vision and was willing to fund it. While they were relieved when Accel had invested in Flipkart, the Bansals had been unhappy with the terms. Flipkart had been valued at less than $5 million and the Bansals had felt shortchanged. But in this new round of investments, they would call the shots and Accel would have to acquiesce to their terms. Sachin pushed especially hard, seeking a valuation of $50 million. He seemed to be a man transformed. The previous year, he had felt overawed by Infibeam’s Vishal Mehta, grateful that someone was offering to put him and Binny out of their misery. Now he had the brazenness to ask for a valuation of $50 million, and the skill it took to be granted as much as $40 million. There was no science behind this – it was a matter of demand and supply, a confluence of similar sensibilities.
When Lee had made the decision to invest in Flipkart, he hadn’t spoken to the other venture lords in India, most of whom were sceptical about the company’s prospects. His decision had been simple. It wasn’t as if he could foresee the Bansals’ success in running a large e-commerce operation. It was futile to make that kind of judgment at this early stage. Instead, what he could see were two serious entrepreneurs who had studied the retail market deeply and had bright ideas about unlocking it using technology. And he was getting a chance to pick up a large stake in a promising venture for a relatively small sum. This was all the evidence he needed.
It was one of the biggest startup deals of the time, but for Flipkart employees such as Mekin and Sujeet, the only surprise was the speed at which it happened. Even before Lee’s endorsement, they had little doubt that Flipkart was going to become something special. Business was doubling and tripling in size every quarter. They were assembling a stellar team. For anyone who had seen Flipkart from the inside, one thing was clear: you did not want to miss this journey.
Those were happy days for the Bansals. In November 2009, as the deal with Tiger Global was being finalized, Sachin became a father. His wife, Priya, had given birth to a boy. A few months later, in February 2010, Binny married his girlfriend Trisha, a young fashion designer. The two had serendipitously met nearly five years ago just before Binny graduated from IIT Delhi. While Sachin’s decision to become a businessman had enhanced his marriageability, Binny had to work hard to bring around Trisha’s family who were initially unsure about the groom’s choice of career. But they had eventually relented. Binny’s wedding only added to the general feeling of positivity that had been permeating through Flipkart’s halls.
8
‘BINNY KE BATCH SE HO?’
Lee Fixel stressed the ‘Fast’ in Get Big Fast. By the time he had invested in Flipkart in early 2010, the company was already expanding at a frenetic pace. It generated revenues of ₹11.6 crore in the financial year 2009–2010.1 Lee’s entry redoubled Flipkart’s ambition and confidence and turbocharged its expansion efforts. The fresh capital allowed the company to spend more freely on launching new product categories, hiring
