This story is quite amazing –
In March 2008, 6 months after Flipkart launched, it had broken even. The startup was generating sufficient revenues and was self-sustaining. Customers were happy and kept coming back to buy more.
In 2007, Apart from Flipkart, two other e-commerce startups emerged from the detritus of Amazon India. One was “Pustak” that sold international books unavailable in the country to domestic customers. Second was “Infibeam” founded by Vishal Mehta. He came from a wealthy Gujarati business family that owned a large Toyota dealership. After working in Amazon’s acquisitions team in Seattle for 5 years, Vishal moved back to India in 2007.
He gathered a stellar founding team to start Infibeam – Ajay Chandra and Vijay Subramanian, two bright engineers from Amazon.
Like Flipkart, Infibeam also wanted to become the Amazon of India. Unlike the Bansals, however, Vishal had no shortage of startup capital.
After its launch, Infibeam quickly expanded into other categories such as books, mobile phones, and laptops. In the middle of 2008, Vishal approached the Sachin and Binny Bansal. Flipkart was doing well with books, but it was still very small. Vishal invited Sachin and Binny to Ahmedabad for a proposal where he wanted the Bansals to sell Flipkart to Infibeam
Flipkart would surely get crushed. The Bansals could join Infibeam instead and create something big together. Vishal’s pedigree and his family’s standing lent him an imposing aura. The Bansals were not just impressed by Vishal but they also knew how good his team was. On their own, they didn’t stand a chance against them especially given Vishal’s personal financial strength.
Flipkart was yet to be incorporated as a company. Sachin had recently got married and it was perhaps time to cut his losses. Selling out didn’t seem like a bad idea. Running out of options, the Bansals agreed to sell Flipkart
The paperwork for the buyout was prepared. Vishal was offering the Bansals less than 5% of Infibeam in exchange for all of Flipkart. The compensation was entirely in Infibeam shares, and they were to move to Ahmedabad. When he saw the sale letter, Sachin was shocked. Infibeam offered him and Binny each less than Rs 15,000 as a monthly salary.
It was humiliating. Sachin asked Vishal for a higher amount, only to be told haughtily that it is a fair offer. Now, Sachin was truly offended. He told Vishal that they would get back to him soon.
This talk helped the Bansals recover their senses. Vishal’s spell was broken. They realised that Flipkart’s progress may not be impressive to an outsider but it was in fact substantial.
They were growing rapidly, learning new things, improvising, and improving every week. They decided they would continue to work on Flipkart.
Vishal kept following up for weeks, eager to wrap up the deal. He was carefully fended off every time!
Today Flipkart is values at $ 35bn 🙂 (https://www.crunchbase.com/funding_round/flipkart-secondary-market–5c9f587e)
Credit: From linkedin by Aditya Kondawar, Partner & Vice President – Complete Circle Capital