On February 11, Mukesh Bansal announced his exit from Flipkart. Post that, there was speculation that the rise of Flipkart’s co-founder Binny Bansal, 32, to the post of company CEO was a trigger for Mukesh, who also nursed ambitions of heading the company.
Sources pointed out that it was “inevitable” that Mukesh would exit at some stage. After all, having tasted the power of creating entrepreneurial value, it is hard to get as enthused for a small percentage of shareholding of someone else’s company.
“Whatever was written about me was all media speculation. I was very supportive of Binny [Bansal] being the CEO. I think he will do a phenomenal job. He is very focussed and highly energised and has the backing of a great team. I’m glad that he is running the business. I never chased any title or role so far. I started from scratch, so for me designation, title was never a consideration,” says Bansal, adding that both Sachin, 34, and Binny were very surprised with his decision. “However, after a few interactions they understood my intent. By and large, they have been very supportive.”
Industry analysts offer this perspective: So far India’s nascent startup ecosystem has had a slew of examples where the promoters of acquired companies have exited post the merger. Phanindra Sama of redBus (which got acquired by online travel services group Ibibo) and Raghunandan G of TaxiForSure (which was acquired by Taxi aggregator Ola) and more recently Sahad PV of VCCircle, a digital news platform (which was acquired by media and publishing firm News Corp) are classic cases in point.
“It is a fact that for a successful founder, it is very difficult to work as an executive, even if it happens to be as head of a much larger entity. For any founder and more so for a hugely successful one with a stupendous exit and money in the bank, the itch will always be to start something else which is bigger and outdo himself,” says Harminder Sahni, founder and managing director of Wazir Advisors, a retail consulting firm.
Most M&A agreements have clauses that ensure that the acquired company’s promoters stay in the merged entity for a stipulated period of time for seamless consolidation and that when they move out they would not start a competing business. This could well be the case with Mukesh, says a source.
Subrata Mitra, partner at Accel Partners, one of the early investors at both Myntra and Flipkart, calls it “a tough decision for everyone, including Mukesh”. “But, we have to deal with it in a mature way. Once the three (Mukesh, Sachin and Binny) of them decided that this was the best thing to do, we took it as it was,” says Mitra.