Many of these companies were launched by engineers who were barely out of college. Suddenly, internet entrepreneurship – long considered an unserious, feeble initiative, had become fashionable. Thousands of young men – they were almost always men – in engineering colleges ventured into entrepreneurship, certain that the surest, easiest way to become rich, acquire fame, get laid, was to become a startup founder. Engineering degrees obtained, they were going to transform India by harnessing the power of technology. Chastened grey-haired venture capital investors who had lorded it over entrepreneurs reversed course, now chasing these young nerds, begging them to take their money.
What had prompted this startling turn, this outpouring of love and capital on Indian startups, was the coming together of a few disparate events. Perhaps the most important factor was the astonishing wealth creation in the internet ecosystem of China. In May 2014, China’s second-largest online retailer, JD.com, had gone public at a valuation of more than $25 billion.11 A few months later, in September, JD’s bigger rival, Alibaba, listed its shares in the US. It was a record offering, valuing the company at more than $225 billion.12 This made Alibaba the world’s most valuable e-commerce company, its market capitalization easily exceeding that of Amazon and eBay. Alibaba’s rise had been many years in the making. Founded in 1999 by an English teacher named Jack Ma, Alibaba had vanquished Amazon and eBay by dint of its agility and superior local knowledge, as some accounts suggested.13 Over the years, it had mushroomed into an internet conglomerate with interests in retail, payments, logistics, gaming and various other areas. The public listings of JD.com and Alibaba had resulted in a tremendous windfall for its backers. Tiger Global, the largest investor in Flipkart, was also an early investor in JD.com, while SoftBank owned as much as a third of Alibaba. The Alibaba listing valued SoftBank’s stake at more than $75 billion and made Masayoshi Son the richest man in Japan.14 Many other Alibaba investors profited as well.
Enriched by their bets on Chinese internet companies, these venture capitalists as well as investment firms in the US, Europe and Asia that had missed out on the Chinese boom, flocked to India in search of their next loot. In October 2014, Son came to India after nearly a decade. To his eye, India was the China of a few years ago. In New Delhi, he told a newspaper reporter, ‘Ten years ago, China was the best opportunity, and now India has the best opportunity.’15
Twenty-five years earlier, another corporate VIP had expressed a similar view. Jack Welch, chairman of the American conglomerate General Electric, had predicted that India and China were the new big markets of the future.16 Even at the turn of the century, hopeful analysts and consultants had posited that the two countries would become ‘superpowers’, more or less simultaneously. It didn’t matter that by then China’s economy was already about three times the size of India’s. It was the same belief that had prompted investors to bet on offline retailers in the 2000s. They were convinced that India would go China’s way and rapidly modernize its retail sector. However, this never happened. Even after nearly two decades of continuous investment, modern retail had a paltry reach in India.17 In fact, Kishore Biyani, India’s would-be Sam Walton, had been forced to sell off key businesses in order to repay debts.18
By 2014, China’s economy was five times as large as India’s. Despite this, investors reverted to their old conviction, certain that India’s internet space would turn out to be a goldmine. On the surface, it did have a few similarities with China’s internet sector of the noughties. Every month, millions of new Indians were using the internet for the first time on cheap but powerful smartphones. The bulging internet population was poised to expand even faster as prices of mobile internet connections fell. The introduction of 4G services would result in lightning internet speeds.
And then there was Flipkart, the indigenous e-commerce champion standing tall, proving that Indian entrepreneurs could indeed make it big in the internet business.
17
THE COMEBACK
By the time of the billion-dollar fund raise, Sachin Bansal was fighting his own battles within Flipkart.
In the eighteen months that Sachin had been on the margins of the company, it had turned into a retailing juggernaut. After taking the reins in late 2012, Binny had strengthened Flipkart’s spine. Kalyan Krishnamurthy, on secondment from Tiger Global, had vastly improved the finance function and empowered the sales team. Under Amod Malviya, Flipkart’s technological edge over rivals had widened. The logistics fleet, technically owned by WS Retail, was expanding at a dizzying pace under Sujeet Kumar, who had returned from exile to lead the company’s relaunch of its large electronics category and then its supply chain. Vaibhav Gupta, a former McKinsey consultant, had emerged from anonymity to lead the business finance function which, along with the sales division, had become the driving force of the company. Ankit Nagori had been promoted to lead the company’s marketplace business. Flipkart had started this initiative of adding third-party sellers on its platform in 2013, to address regulatory concerns about its structure as well as expand its assortment of goods. These executives, along with other senior leaders at Flipkart, made a formidable team. But it was a team that had little room for Sachin. In fact, many of these executives had an uneasy equation with the Bansals, and especially with Sachin. Every once in a while Sachin would call his colleagues, mostly to complain about something. The recipient of the call, not pleased at having to hear what had upset or
