The favoured suitor of Lee Fixel and most of the other Flipkart investors had always been Walmart. Apart from their reluctance to share information with Amazon, they were also concerned that India’s anti-trust regulator wouldn’t approve a deal between Flipkart and Amazon, given that the two companies enjoyed a virtual duopoly in e-commerce. On the other hand, the engagement with Walmart was deepening rapidly. Flipkart executives had visited Bentonville several times to make presentations and the two companies had come to an agreement on important matters, including Flipkart’s valuation. Both Walmart and Amazon had offered to value the company at more than $20 billion, nearly double the valuation that Flipkart had fetched less than a year ago in its last funding round.
While Sachin had played an energetic role in the discussions with Walmart, it was Lee who had been pulling the strings and had provided the confidence to the Walmart officials to push on. Lee was no fly-by-night operator. He had a stellar reputation in the startup world and his presence and assurances about Flipkart went a long way towards smoothing the bumps in negotiations.
AS THE SALE discussions were ongoing, another obstacle in Sachin’s path back to the CEO seat had been cleared towards the end of winter 2018. To everyone’s surprise, Binny had made up his mind to leave the company. He had indicated to Flipkart’s board that his work at the company was done. After an exhausting ten-year run, he wanted to do something less taxing, something that would leave him with a lot more time for his wife and their eighteen-month-old twins. Binny was willing to facilitate a smooth transition, but he was determined to move on.
This was acceptable to Sachin, who had taken charge of the deal discussions. Working closely with Goldman Sachs, the investment bank that Flipkart had hired to represent itself, Sachin came up with an outline for the deal. Flipkart would sell fifty to fifty-five per cent of the company to Walmart, giving it ownership control. But it would retain SoftBank and Tencent as shareholders and persuade Microsoft to increase its stake in the company. After his experience with Tiger Global, Sachin didn’t want Walmart to be the sole authority on the Flipkart board. It was best to distribute power. Flipkart also solicited Google and Paypal for minority investments. Essentially, what Sachin had in mind was an overarching anti-Amazon alliance. Sachin had personally spoken with Google CEO Sundar Pichai, who seemed open to the proposal. Another Indian-origin CEO, Microsoft’s Satya Nadella, had expressed willingness to raise his company’s holding in Flipkart.
Additionally, to prove his commitment to the cause, Sachin had sought to increase his ownership in Flipkart. He had begun discussions with financial institutions about taking a personal loan of anywhere between $450 million to $1 billion in order to purchase Flipkart shares and lifthis stake to more than ten per cent, nearly double of what he presently held. He had even discussed the possibility of borrowing from Walmart to fund part of this purchase.
Sometime in March 2018, after Binny had expressed his wish to leave Flipkart, Sachin moved again to assert his claim to the throne.
Lee had presented the Flipkart team to Walmart as an ideal, complementary mix of skills. There was Sachin, the technologist who had the ability to imagine the improbable; Binny whose forte lay in operations; Ananth Narayanan, the former McKinsey senior partner who had turned Myntra into an efficient, fast-growing retailer while nurturing the company’s innovation impulses; Sameer Nigam, a nimble entrepreneur who was building a digital payments app that could become a massive business in the future. But it was Kalyan Krishnamurthy who had been marked out as indispensable, the man who had turned Flipkart around, who made it tick every day.
Sachin, however, had a different picture in his mind. The Flipkart co-founder made it clear to his company’s board that he wanted to become Group CEO. Though his candidature had been rejected by the board earlier, Sachin believed he had solidified his claim by proposing to double his ownership in the company. This constituted a huge personal risk, as Sachin would have to borrow hundreds of millions of dollars to fund the purchase. But he didn’t care; it was a statement of his conviction about Flipkart’s future, about his willingness to risk everything in order to return to the driver’s seat at his beloved company. Sachin believed that he had atoned for his mistakes by spending time away and giving Kalyan and Binny the freedom to run Flipkart as they saw fit. He had even agreed to leadership coaching and to improve his interpersonal skills. It was now time for him to get his due, especially in light of Binny’s desire to leave the company. He had no doubt that an innovative startup such as Flipkart had to be run by its founder. Though Kalyan had his uses, he was ultimately just an employee. It was Sachin who had the entrepreneurial drive and vision. Kalyan would have to learn to work with him.
Binny’s impending exit compelled the Flipkart board to act on Sachin’s claim. This time, Lee took it upon himself to survey
