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Business
11 Oct 2018

Reportedly, Flipkart co-founder Sachin Bansal to invest $100mn in Ola

Ola could get $100mn boost from Sachin Bansal

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.

In context

Ola could get $100mn boost from Sachin Bansal
What we know about the reported investment

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.

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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.

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