Reportedly, Flipkart co-founder Sachin Bansal to invest $100mn in Ola
What's the story
In what could mark the largest personal investment in the Indian internet space, Flipkart co-founder Sachin Bansal is reportedly in the process of finalizing a whopping $100mn (around Rs. 740cr) investment in ride-hailing start-up Ola Cabs. The investment takes on particular significance as it amounts to 10% of the proceeds Bansal received when Walmart acquired Flipkart earlier this year. Here are the details.
Investment
What we know about the reported investment
When Walmart acquired 77% stake in Indian e-commerce giant Flipkart earlier this year, Sachin Bansal has sold his entire shareholding of 5.5% to Walmart. In doing so, the Flipkart co-founder ended up pocketing around $1bn from the deal. While Bansal has been an active investor in start-ups since 2014, his investments have generally been in the ballpark of $1mn to $2mn.
Details
The investment will largely be through subscription of new shares
While Bansal and Ola CEO Bhavish Aggarwal have declined to comment so far, people familiar with the matter say that the investment will largely be through subscription of new shares of Ola. Only a small component will come through a secondary sale of shares by existing shareholders. People familiar with the matter think the investment is a safe bet owing to Ola's market position.
Bansal-Aggarwal
Bansal and Aggarwal have enjoyed a close relationship
It's interesting to note here that Bansal and Aggarwal have enjoyed a close relationship over the past few years. After raising concerns about unfair competition owing to the presence of global giants like Amazon and Uber, the duo, along with local start-ups and entrepreneurs, founded an industry group called IndiaTech. While Bansal later stepped down as IndiaTech's founder, his entry in Ola is important.
Internal battle
Bansal's entry comes when Ola is facing an internal battle
The investment also comes at a time when CEO Bhavish Aggarwal is locked in a battle for Ola's control with the company's largets shareholder, Japan's SoftBank. While Ola co-founders Aggarwal and Ankit Bhati recently strengthened their shareholding rights allowing them to veto further stake purchases by SoftBank, Bansal's entry as an investor might add another ally in their battle against SoftBank.