An outline of the sale was agreed upon in April 2017. SoftBank would invest about $1–1.5 billion in Flipkart directly, and buy Flipkart shares worth $500 million to $1 billion, chiefly from Tiger Global. Flipkart would take over Snapdeal for about $1 billion or lesser in stock. It was a hugely disappointing outcome for the Snapdeal investors, of whom there were more than two dozen. Just as Lee had spotted Flipkart’s potential, they had seen Snapdeal as a once-in-a-lifetime investment that would shape their fortunes. A sale at $1 billion was a terrible comedown for a company that had been valued at $6.5 billion just one year ago. And the compensation wouldn’t even be in cash.
This time, even Kunal seemed to have lost his swagger. His colleagues muttered to one another that the man who had seemed indomitable had all of a sudden aged visibly in months. The sale process, chronicled almost daily in the media, was a humiliating experience for Kunal. He had thought of himself as a first-rate entrepreneur, superior even to the Bansals of Flipkart. It was a view that had been reinforced for years by the Snapdeal investors. To be forced to sell out for a pittance to his rivals – people he had criticized and ridiculed for many years – was deflating. No one was calling him a genius any more. He had become irrelevant. Even some of his own investors had turned against him. In April 2017, Kunal indicated that the fate of the company was out of his hands. In an email to employees, he wrote that Snapdeal investors were ‘driving the discussions around the way forward’.4
It was true that the Snapdeal investors had taken matters into their hands, but the real picture was more complex. Not only had some of them lost faith in Kunal, they had also turned against each other as they scrambled to salvage their own interests. For many months, the board had become dysfunctional, with individual members locked in a civil war.5 A former Snapdeal executive aptly called it the tragedy of the commons.6
Snapdeal had, in fact, been forced to pass up two funding offers because of the rift between the board members. At the heart of the matter were greed and egos. SoftBank had offered to invest more in Snapdeal but its conditions would have led to a slide in the ownership of other shareholders and given SoftBank almost complete control over the company. This was unacceptable to the other shareholders, who promptly exercised their veto to bury the deal. The impasse continued for months even as Snapdeal’s cash reserves fell to alarmingly low levels.
After months of parleying, SoftBank finally brought around some of the key players by offering settlements in July 2017. The Snapdeal founders, too, reluctantly agreed to explore the sale offer, provided that their terms – lucrative cash payouts for them, no job losses for employees, and a few other conditions – were met. The Snapdeal and Flipkart teams leading the negotiations were set to meet in Bangalore on the last day of the month to seal the merger. Just one day before the meeting, however, it was cancelled. Tragedy had struck again. Pouncing on the indecisiveness among Snapdeal shareholders, the company’s founders called off the sale.7 SoftBank’s hope of salvaging its investment was buried. The other warring investors were leftwith a holding that had lost most of its value. Snapdeal would continue as an independent company, but only in a much-shrunken form, selling assets, cutting jobs, vacating many product categories. But at least the company’s founders and their investors had their pride intact.
Back at Flipkart, its executives and investors were overjoyed. They were saved the distraction of managing a complicated asset, and they would still enjoy the benefits of the engagement. This was because SoftBank had decided that it would invest in Flipkart regardless of the failed merger. On 10 August 2017, less than two weeks after the sale fell apart, both SoftBank and Flipkart announced the investment. SoftBank would pour more than $2.5 billion into the online retailer, the biggest deal ever at an Indian startup. About $1.4 billion would go directly into Flipkart and shares worth more than $1 billion would be purchased from Tiger Global and a few other Flipkart shareholders. Flipkart’s cash reserves now swelled up to more than $4 billion, providing the company enough ammunition for many years to come.8
As an observer put it, Flipkart had got ‘the milk without buying the cow’.9
IT HAD NOW been more than eighteen months since Sachin Bansal had last been CEO of Flipkart. In this time, he had been a remote presence at the company, kept at a distance first by Binny, then by Kalyan. He could do little about it other than feel agitated. He was raring to come back to an operating role. He had started preparing the ground for a return. In May 2017, he had taken the government relations function back from Nitin Seth. He had begun to spend time with Flipkart’s engineers, discussing innovative ideas and the new technologies in which the company needed to invest. He had been urging Kalyan to appoint a chief product officer in order to further the technology agenda, which he believed was being neglected.
His clashes with Kalyan had continued unabated, even after Nitin Seth’s exit. Their relationship was so evidently broken that it prompted an intervention from the alarmed Flipkart board members, who suggested that the two, along with Binny, see a leadership coach to resolve their differences. This was a popular practice at Silicon Valley startups where many entrepreneurs, including Steve Jobs, Jeff Bezos and Larry Page, had engaged leadership coaches.10
Lee Fixel arranged for Jim Kochalka, an experienced coach that Tiger Global had employed previously, to work with Sachin, Kalyan and Binny. Kochalka, an American in his sixties, met
