Big Billion Startup: The Untold Flipkart Story

against the advice of almost everyone they knew. Now, here they were, seven years later, with the dream within their grasp. Even their colleagues, people who had worked closely with them for many years, were in awe. The Bansals were keenly aware of their new supreme status.

In the halls of Flipkart’s headquarters, Binny referred to the funding round in mysteriously dramatic fashion. He said to a colleague, ‘Funding ho rahi hai – we’re raising another round of funds.’

‘Kitni?’ How much?

‘Bahut badi.’ Massive.

‘Kitni badi?’ How massive?

Without saying a word, Binny simply raised one finger.³

On the night of the billion-dollar funding announcement, a group of Flipkart leaders, including Sachin and Binny, had gone to a nearby bar in Koramangala to celebrate. In the middle of revelries, the bar’s television played one of the many interviews the Bansals had given that day. Everyone stopped to watch the interview and the attendant reels of adulatory headlines in silence, as it sunk in that Flipkart – and the Bansals – had just levelled up to an entirely new league.

Sachin savoured the billion dollars more than anyone else. For the second time in a few months, his favourite number had been realized. When Sachin spoke after the fund raise, it was clear that he believed he was a man of destiny. ‘This is a big milestone not just for Flipkart, but for internet firms in India in general. We believe India can produce a $100 billion company [in sales] in the next five years, and we want to be that. Whether it takes five or ten years, we are here for the longer term.’⁴

He was saying that he wanted to build The Great Indian Internet Company.

WOULD FLIPKART BECOME India’s greatest internet company? Could it achieve revenues of $100 billion? In five years? Or ten? Was Sachin Bansal India’s answer to Jeff Bezos and Jack Ma?

At least one thing was certain: Bezos was going to have a part in framing the answers to all these questions. The legendary CEO and founder of Amazon was pained by his company’s collapse in China. This made his desire to succeed in India even more intense.

The day after Flipkart revealed the $1 billion fund raise, Bezos announced that Amazon would invest as much as $2 billion in India. Emphasizing the ‘huge potential’ of India’s economy and its e-commerce market, he predicted that India could become the fastest country in Amazon’s history to deliver a billion dollars in gross sales. He finished with a flourish: ‘A big “thank you” to our customers in India – we’ve never seen anything like this.’⁵

Two months later, Bezos visited India on a publicity tour. He met with the new prime minister and spent time with the Amazon India team. On a Sunday morning, outside the Amazon office in the World Trade Centre building in northern Bangalore, Bezos put his flamboyance on full display. Decked in a white bandhgala and maroon dupatta, he stood on top of a truck of local make, and handed Amit Agarwal, the head of the India business, a mock blown-up cheque of $2 billion, as the media clicked photographs. As if this wasn’t enough, later in the day, amid many guffaws, Bezos proclaimed to journalists that the India business was ‘extremely important’⁶ to him, and that Amazon had ‘blown past the initial set of goals’⁷ here. The message was clear: Amazon would do whatever it took to win in India.

At Flipkart, Sachin Bansal woudn’t bite. He called Bezos’ visit to the country a ‘panic reaction to the fact that Amazon is not able to make any inroads in India.’ He boasted that Flipkart’s market share had only increased that year.⁸

A month after the Bezos publicity blitz, another firm joined the party. In October 2014, Snapdeal, which was still India’s second-largest e-commerce firm, announced that it had received more than $600 million from the Japanese investor SoftBank Group. Kunal Bahl had successfully positioned the company as an anti-Flipkart. He had persuaded his investors that e-commerce was a battle of business models in which his vision of a bazaar would prevail over the inventory-led operations of both Flipkart and Amazon. His confidence, charisma and showmanship had won SoftBank over, and diverted them from the fundamental weaknesses of the company, poor logistical and warehousing infrastructure being some of them. Even startup investors outside Snapdeal began to believe that Kunal, in fact, was the real visionary entrepreneur who would build a bigger business than Flipkart and Amazon while spending far lesser. While announcing the SoftBank funding, Kunal couldn’t resist taking a dig at his rivals. He said in an interview that Snapdeal didn’t hold inventory, and that ‘we don’t do private label because we don’t want to compete with our sellers’. Everything he denounced in this part of the interview were essential features of the business models of Flipkart and Amazon.⁹ It was now officially a three-way war.

Along with showering Snapdeal with cash, SoftBank invested in two other startups: Ola, an online cab company, and Housing, a real-estate portal. That wasn’t all. SoftBank’s founder Masayoshi Son announced that he would plough $10 billion into Indian companies over the next decade. In any other year, that estimate, so apparently wanton, may have been met with scepticism. But not in 2014. And not when Son was involved. Son invested in tech businesses with an unmatched zeal. Despite being driven to the edge of ruin during the dotcom bust, he continued to strike big deals in the telecoms business and pour cash into unproven tech ventures. His faith had borne fruit: SoftBank’s stake in Alibaba, the largest e-commerce company in China, was worth a fortune. He was keen to invest in India, a nascent, but evidently promising market.

By now, a serious funding boom for startups was underway.¹⁰ Yet again, the herd mentality of investors was on display. Like the e-commerce funding boom of early 2010 triggered by Tiger Global’s outsized injection of $10 million in Flipkart, the whopping $1 billion investment in the same company organized by the same