Thursday 13 July 2017

Flipkart Bansals to reclaim their company reins from Krishnamurthy?

One may say Flipkart always operated as per the whims and fancies of its founders Sachin and Binny Bansal. But, this doesn’t appear to be the case, as, from January 2017, Kalyan Krishnamurthy the new Flipkart CEO and Tiger Global Management have mainly been in charge.
Reports claim that the Flipkart creators will be moving to more prominent positions in the company, now that Tencent Holdings Ltd. is its shareholder and a merger deal is forming with Snapdeal through SoftBank Group Corp.
After the shower of funds in April from Naspers-Tencent (Nasper influenced Tencent to invest in Flipkart) and if the deal with SoftBank goes smoothly, Flipkart will have a board of 5 superpowers – Nasper-Tencent, SoftBank, Tiger Global, Accel and the Bansals.

Who’s in charge at Flipkart?

Looks like it is Tiger Global managing director, Lee Fixel who has been a major decision maker at Flipkart since its investment of $10million in the company, back in 2009.

CEO Swap

At the start of the year, the CEO change was based on directions from Fixel. Krishnamurthy a managing director at Tiger Global, pushed Binny Bansal out of his position which he had acquired only a year ago from Sachin Bansal.

Handling Snapdeal merger deal

An anonymous Flipkart shareholder said, “The SoftBank deal is the one to watch out for. They usually like to call the shots (at the board level) in any company they invest in. It’ll be interesting to see how they work with Tiger and the Bansals. There’s also Lee’s personal equation with the Bansals. It’s a very delicate situation.”

Bansals moving to the forefront of Flipkart again

With Krishnamurthy at the centre, all day-to-day operations, as he led Flipkart’s turnaround efforts back in 2016 and Nitin Seth the new COO, it was a signal that the founders would stand back from daily operations.
Now, however, according to three sources aware of the happening at the ecommerce firm, the Flipkart founders are already increasing their involvement in running the platform.
Seth was in charge of Flipkart’s logistics arm eKart and other functions and would report to Krishnamurthy. But, during the last two months, things began to change, claimed the three people cited above.
In May, Seth decided to leave Flipkart leaving Krishnamurthy to take over his tasks. The three insiders mentioned that the founders were critical of Seth’s performance, but Krishnamurthy said that Seth left due to personal reasons.

New responsibilities for the Bansals

Responsibility #1

Only weeks before Seth resigned, Binny began running his corporate communication tasks and Sachin the position of government relations, the three persons above revealed.

Responsibility #2

Binny has been working as a mentor at eKart. He has regularly met with middle-level managers at eKart and has been more active in the company’s strategy function. Sachin on the other hand has been involved in Flipkart’s technology function.

Krishnamurthy still calling the shots

Krishnamurthy is still mainly in charge the three disclosed. This is because he is backed by the board and has strong confidence from firm’s sales and business perspective. He has earned his place as he has held his own against top competitor Amazon India. With his help the company now –
  • Portrays healthy sales growth
  • Bagged $1 billion in funds
But, the company founders still have a say in how things go in their company, due to the organisational structure at Flipkart. They would like to have a chief product officer and at least one senior leader in engineering, the sources said.
One mentioned, “The Bansals have said that Flipkart cannot lose its technology culture. (There’s a perception that) because Kalyan is a business (sales)-focused guy, Flipkart’s tech focus may be diluted. So they have been pushing for more tech and product leaders.”

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