Flipkart founders among India’s richest, amidst debate on e-tailer valuations

Binny Bansal (left) and Sachin Bansal, founders of Flipkart. Since 2013, Flipkart has been slowly shifting to a marketplace model, where it connects customers to thousands of third-party sellers. Photo: Hemant Mishra/Mint

Sachin Bansal and Binny Bansal, the founders of Flipkart, India’s largest e-commerce marketplace, are now ranked among the top100 richest people in India, with a net worth of $1.3 billion each, at a time when opinion is divided on whether Indian startups are over-valued.

The Bansals’ swift ascent — they are the youngest in the list — is not surprising, given that the company raised over a billion dollars in just the last one year. Valuations of e-commerce companies have gone through the roof, and with that the value of shares that founders hold.

Flipkart also came out with its own valuation, for the first time, although the number was known in industry circles based on gross merchandise volume of products sold on their portals, and on investment valuations. The company, backed by DST Global, Qatar Investment Authority and Tiger Global, is now worth $15.2 billion, according to an official response. The company shifted base to Singapore for tax purposes last year, and is speculated to be preparing for an IPO. The large majority of its employees are in India.

Prominent investors such as Vinod Khosla have said that e-commerce firms such as Flipkart and Snapdeal are over-valued. Venture capitalists have invested $2.33 billion in Indian start-ups in the June quarter alone, according to data by CB Insights, almost three times of what they invested in the same period last year. Ratan Tata, who has been among India’s top individual investors in some of the hottest early-stage startups such as Ola, Snapdeal and Urban Ladder, has similar views as Khosla. “It’s true valuations are very high and valuations seem to be driving these companies more than the more traditional metrics of valuations,” he said in June.

Others have a different view. Alok Goel, managing director, SAIF Partners, said that in any segment of the industry, there are about 10-20 startups that are being funded, and that e-commerce firms are not over-valued. “If there are 20 companies getting funded, roughly four will make it big and 16 will fail. But no one knows which one, and hence investors will put early bets,” he said in this interview.

The fact remains that none of them — from Flipkart to Paytm — is making any profits, nor close to being out of the red. But they are hiring aggressively, including experienced executives from the Silicon Valley who have the skills to manage fast-growing startups to the next level. And as they get more funding, and generate higher sales, expect more entrepreneurs in high-valued startups to feature in the top 100 richest Indians. Profits, however, will take time coming.

Also read:

 Flipkart buys back logistics arm from WS Retail ahead of possible IPO

Fourth Partner Energy raises $2m from Infuse Ventures, others

Ex-FlipKart exec Saran Chatterjee joins Housejoy as CEO

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.