Revision as of 14:39, 13 December 2015

Flipkart: 2014From the archives of India Today

Flipkart: 2008-14

Rags to riches: Flipkart’s journey from Rs 4,00,000 to $5-6 billion

The Times of India Business Insider | Jul 31, 2014

In the biggest fund-raising ever for an Indian e-commerce company, in 2014 Flipkart attracted a whopping $1 billion from its existing investors Tiger Global Management and Naspers.

As per industry experts, the Bangalore-based company is now valued at somewhere between $5 and $6 billion — double the estimated value of $2.5-3 billion in May this year.

Flipkart co-founders Sachin Bansal and Binny Bansal want to make Flipkart the country's first Internet company to be valued at $100 billion.

Flipkart has till now garnered almost $1.7 billion as it battles Amazon and Snapdeal for the top slot.

The rise: a timeline

The Times of India presents a timeline of Flipkart's funding — how within seven years a company that founders started off with just Rs 400,000 — is now worth thousands of crores.

October 14, 2008: Co-founders Sachin Bansal and Binny Bansal start Flipkart with a capital of Rs 400,000

July 15, 2010: Tiger Global joins with an investment of $10 million

June 16, 2011: The company announces new logo and gets another investment of $20 million by Tiger Global

August 24, 2012: Investment of $150 million by Tiger Global and Naspers group, crosses gross sales of Rs 100 crore

July 10, 2013: Attracts investment of $200 million from Tiger Global, Naspers, Accel Partners and Iconiq Capital, crosses single-day shipment of 1.3 lakh

October 9, 2013: Another investment of $160 million by Dragoneer Investment Group, Morgan Stanley Investment Management, Sofina, Vulcan Capital and Tiger Global

May 26, 2014: Flipkart acquires Myntra

July 29, 2014: Attracted a whopping $1 billion from Tiger Global Management and Naspers

Just a day after Flipkart announced raising $1 billion, e-commerce giant Amazon, too, announced that it will invest an additional $2 billion in India to expand its growth in the country.

Founders: Sachin Bansal & Binny Bansal

India Today

Sachin Bansal & Binny Bansal

Their e-commerce enterprise, Flipkart, was valued at $7 billion in July 2014, after the company raised $1 billion from investors to bolster back-end operations, and according to reports, closer to $11 billion by november 2014.

Flipkart kicked up a storm in Indian retail after its big billion day sales on October 6 raked in Rs.600 crore on the back of hefty discounts.

They have grown their company aggressively, snapping up fashion retailer Myntra in May, and hiring an additional 12,000 personnel to beef up support and technology operations.

First book order

They had to buy leaving microsoft to change the world by john wood from a local bookstore before shipping it to their first customer.

The Bansals’ net worth

Bansals nearly as rich as Infy co-founders

The Times of India Jul 30 2014 Anshul Dhamija & Samidha Sharma Bangalore TNN

Flipkart Founders’ Combined Net Worth $1Bn

The Bansals of Flipkart—Sachin and Binny —now boast of a combined net worth in excess of $1 billion, inching closer to that of Bangalore’s iconic tech billionaires N R Narayana Murthy and Nandan Nilekani of Infosys.

The fresh $1-billion fund raise values the Bansals’ combined stake of approximately 15% at over Rs 6,000 crore. The four-member Murthy family has a net worth of around Rs 8,700 crore in India’s second largest IT services company, while the Nilekani family’s net worth stands at Rs 6,500 crore.

Consumer internet ventures have been getting fabulous valuations. The US and Chinese internet markets have fostered many billionaire entrepreneurs as their ventures went public. Facebook's Mark Zuckerberg has a net worth of $33 billion, while Alibaba's founder Jack Ma has a $12.5 billion net worth, up $8.9 billion year-todate, according to the Bloomberg Billionaires Index.

The Bansals, who are not related, have a higher net worth than Infosys' co-founder and outgoing CEO S D Shibulal, who along with his family holds shares worth Rs 4,300 crore in the company . Infosys' other co-founder Kris Gopalakrishnan's family has a net worth of around Rs 6,500 crore, as of Tuesday .

“On paper the Bansals personal wealth is a great story , but we will have to wait for a listing to see their actual net worth,“ said an investment banker who did not want to be named. Infosys is now into its fourth decade and has a market cap of about $30 billion.

Flipkart’s $7 billion valuation story has been scripted in just seven years, and the Bansals are now talking of creating a $100-billion e-commerce company.

From 2011 to 2014, Flipkart grew its sales from $10 million to an annualized $2 billion, an over 100 times growth in three years. There is a huge revolution in e-commerce in India, with the future of retailing coming from the internet, said the Bansals while announcing their latest fund raise. The Bansals believe that in the next 10 years, India would have several $100 billion companies in the internet space. “Flipkart is much bigger today than we or our investors had ever imagined,” Sachin Bansal said.

ESOPs enrich employees

About 400 Flipkart employees with stock options become crorepatis in less than a decade

By Radhika P Nair, ET Bureau | 14 Aug, 2014 The Economic Times

BANGALORE: About 400 employees with stock options at online retailer Flipkart have hit the 'crorepati' jackpot because of the surging valuation of the online retailer.

The bonanza is reminiscent of the times when thousands of employees — among them office assistants, drivers and receptionists — at another Bangalore-based company Infosys hit Esop paydirt. "About 400 of the employees who own a stake have now become crorepatis," said a person who has direct knowledge of the employee stock option scheme at Flipkart, which received $1 billion (Rs 6,000 crore) in funding last month, valuing it at $7 billion.

About one-fourth of Flipkart's 7,000 full-time employees own a stake in the company.

At the senior-most level, nearly 20 employees who are at the grade of senior vice-president or above and joined over two years ago are now dollar millionaires, meaning their stock options are worth at least Rs 6 crore on paper. The firm's stock options get vested over four years. Flipkart declined to provide details for the report.

It is the online retail market leader's valuation jump that has led to this wealth creation.

In 2012, the company was valued at about $850 million when it raised about $150 million.

In two years, Flipkart's valuation has grown eight times. For the company's founders, Esops are a conscious attempt at creating wealth for their employees. "While we are competitive when it comes to salaries, Esops offer the opportunity for wealth and value creation," said Sachin Bansal, 32, Flipkart's co-founder and chief executive. "It's a long-term reward for those who believe in the future of Flipkart."

After the IT services industry, ecommerce is now the next big opportunity for employees to create wealth, said Anshuman Das, managing partner at Longhouse Consulting, a recruitment firm that works with startups. "The message going out to entrepreneurs is that wealth creation cannot be restricted to just the founders."

A number of junior employees at Flipkart too hold sizeable stake in the company. This has helped employees like 29-year-old Ambur Iyyappa, a senior manager of customer operations at Flipkart. "I was getting married in 2012 and the buyback allowed me to take care of my wedding expenses," said the graduate of Annamalai University.

Iyyappa, who sold only a part of his stake at the time of the buyback, declined to reveal how many shares he still holds.

He was the second non-founder employee to join Flipkart in 2008. It was only in 2009, the same year that the company raised its first round of funding of $1 million (over Rs 6 crore) from Accel Partners, that Flipkart started providing Esops.

Fashion e-tailer Myntra, which was acquired by Flipkart in May, allowed employees to sell shares at the time of the acquisition, according to a person with direct knowledge of the deal. The company declined to confirm this. Myntra provides Esops to all its core employees, numbering about 600, in functions such as technology and marketing across all levels.

For existing employees, Esops provide recognition.

2015: 23 employees get Rs 1 crore+ annually

The Times of India, Dec 8, 2015

Sagar Malviya & Sreeradha D Basu

23 Flipkart Internet employees draw more than Rs 1 crore salary annually

Flipkart Internet, the consumer-facing arm of the ecommerce giant, had over 23 employees who took home more than Rs 1 crore in annual salary last year — the same as consumer conglomerate ITC — highlighting how new-age firms are paying to attract talent, especially at the senior level. Flipkart Internet's employee benefit expenses swelled threefold to Rs 476 crore, according to its filing with the Registrar of Companies. Mekin Maheshwari, as chief people officer, drew Rs 18.73 crore in annual remuneration during 2014-15, according to the filing. That's more than the salaries of top chief executives such as Hindustan Unilever's Sanjiv Mehta and ITC Chairman YC Deveshwar. Maheshwari quit in September and now has an advisory role. The data is only for Flipkart Internet and excludes other group firms such as wholesaler Flipkart India and Flipkart Logistics. Experts said the remuneration figures could rise if other group companies are included. Flipkart did not respond to an email query. The high salaries indicate that ecommerce companies have a small pool of talent to draw from and need to pay well to attract and retain talent in a business that's considered riskier than established companies. While ecommerce entities are increasingly edging out FMCG (fast-moving consumer goods) companies as the hottest career destination for engineering and B-school students, it's still a tough task for them to get the right talent on board, especially at the senior level. Experts said the nature of talent that these companies seek at a senior level is very scarce, especially in India, and they often have to look at places like Silicon Valley. "They are getting in people from the Valley or people who have worked with organisations such as Google, Adobe, Intuit. For companies like Google, the practice of paying high salaries starts at the engineering college level where they are among the biggest paymasters," said Anuj Roy, partner, digital practice, at executive search firm Transearch. "This phenomenon continues through the hierarchy, so while getting in people from companies such as these, there is a big premium to be paid."

NO MATCH FOR HUL

Still, Flipkart Internet isn't a match as yet for India's top consumer goods firm Hindustan Unilever, which has about 169 executives who drew eight-digit salaries. IT major Infosys had 123 such employees last year and Wipro had 70. However, this could change. Earlier this year, ET reported that ecommerce companies could roll out 500 jobs with salaries exceeding Rs 1 crore each this year, according to estimates by five search firms, including RGF Executive Search and Longhouse Consulting.

While traditional companies have reached a certain scale and operate in a mature market, online players are constantly trying to prove themselves in a hyper-competitive environment.

Life is hell for buyers who purchase defective items from Flipkart. I purchased 6 items and all are thrown in dustbin within a year. concern Customer

"Then there's the fact that people who do fit the requirements have the options to go to many other places which are equally keen to get the same kind of talent on board. The kind of salaries you pay depend largely on who you are competing with." Ecommerce as an industry hasn't stabilised in India and the risk factor associated with it merits a higher salary. According to headhunters, everybody at Flipkart at the level of vice-president, senior vice-president or CXO gets more than Rs 1-1.5 crore as the cash component alone. Senior directors of certain functions such as tech would also get this amount. The biggest packages would be heavily skewed towards people in product and tech.