Top 7 entrepreneurs driving fortunes at India’s most valuable e-commerce companies
14 Feb, 2014, 0702 hrs IST, Radhika P Nair, Harsimran Julka & Biswarup Gooptu, ET Bureau
Since 2011, equity investors have put in about $1.2 billion into online product retail according to research firm Venture Intelligence.
For nearly a year now, some of the world’s most renowned investors have poured in big money to get a slice of the action in India, one of the fastest-growing markets for ecommerce. This surge of capital from a plethora of sources, including risk capital funds and business conglomerates, is directed at a select group of online commerce companies – those who are leaders in their categories and have demonstrated a track record of capital efficiency.
Since 2011, equity investors have put in about $1.2 billion (over Rs 7,490 crore) into online product retail according to research firm Venture Intelligence. About half of this money came last year as investors returned to back companies that showed them a path to becoming profitable. “Serious money is now backing the serious players in the industry,” said Raja Lahiri, a partner at financial advisory firm Grant Thornton India. This flow of capital has given rise to a pool of entrepreneurs with enormous personal wealth who have crafted unique management styles to propel their companies forward at a rapid pace. Close on the heels of the leaders are a posse of aspirants managing fast-growing specialist portals such as Peyush Bansal of Lenskart, Prashant Tandon of HealthKart and Supam Maheshwari, cofounder of baby care portal Firstcry.
These rising stars are grabbing investor attention and attracting serious capital that could catapult them into the exclusive club of India’s internet commerce companies valued over Rs 1,000 crore. ET profiles the top leaders and aspirants who are driving the fortunes at some of the country’s most valuable internet commerce companies
The founder and chief executive of Valyoo Technologies – which runs a string of e-commerce firms that range from selling eyewear and bags to watches and jewellery – is now arms deep in repositioning his company’s operating model, as it strives towards profitability and a public listing. Bansal and his team have decided that it is Lenskart, Valyoo Technologies’ online eyewear brand, that will drive growth and catapult the company to profitability, and they are leaving no stone unturned to ensure the same by fiscal 2015.
“For us to sell watches and bags is very different from running Lenskart. For us, that is e-commerce, and this (Lenskart) is something else. This is something which we have to innovate and build,” says Bansal. For Bansal, an engineering graduate from Canada’s McGill University, speed and flexibility in adapting to the changing environment is the key.
“Peyush knows that in this business (eyewear), which is so dependent on repeat orders, unlike regular e-commerce, it is imperative to satisfy the consumer,” says Rohan Kakkar, 30, founder-director of New Delhi-based metal finishing services startup Vibewell Techniks.
In 2009, Supam Maheshwari decided to take a break. Two years earlier, he had sold his e-learning company Brainvisa to Indecomm Global Services for about $25 million (Rs 155 crore) and his lock-in contract was over.
However, he could not stay away from entrepreneurship for too long. In 2010, Maheshwari along with Amitava Saha, an IIM-Lucknow graduate, who led sales and business operations at Brainvisa, launched babycare site Firstcry. Punebased Firstcry is the leader in the babycare segment and last month raised Rs 92 crore from Vertex Venture Management and existing investors. Maheshwari, 40, an IIM-Ahmedabad alumnus, says the team is the most important element in an organisation. “You don’t have to do it alone,” says Maheshwari, who says the right attitude is more important than talent.
He says the fact that not a single person from his top team of about 12 people have not quit is a matter of pride to him. Jayant Kumar Mahto, vice president of operations at Firstcry, says initially Maheshwari was very hands on in his function.
“He was handling operations till I came on board but I started noticing that he slowly started stepping back and handed over the operations to me without any hiccups,” says Mahto. “He is a task master but values contribution as well.”
For most graduates from Ivy League MBA schools, Wall Street is a natural destination. Not so for Prashant Tandon. Armed with a degree from Stanford University’s much-lauded Graduate School of Business, the 34 year-old decided to use the experience to launch his own venture.
HealthKart, the Gurgaon-based online pharmacy network, founded by Tandon and Sameer Maheshwari, a graduate from IIT Delhi and Harvard Business School, provides customers with access to consumer health products and services. It has also now branched into selling prescription drugs.
“Healthcare in India is an underserved and underpenetrated market. There is a huge demand,” says Tandon. He makes no bones about the fact that while growth is important, profitability ranks alongside. The company has raised more than $20 million from a clutch of investors, who will be looking to make a profitable exit.
Manish Kheterpal, 39, a former director of private equity firm Providence Equity Partners, says he has no doubt Tandon will come out ahead. “The great thing about Prashant is his focus on unit economics and profitability. It’s a rare characteristic to have.”
Myntra (In the Rs 1,000 crore club)
Focused, determined and a good leader—these are the terms Mukesh Bansal’s early investors use to describe the 38-year-old cofounder of the online fashion retail site, Myntra.
These attributes have helped him make Myntra not just the leader in the online fashion category, but also an organisation with strong processes and systems. “Myntra is among the few organisations in the ecommerce industry that have a strong structure. A lot of this is driven by Mukesh,” says Anshuman Das, managing partner at recruitment consulting firm Longhouse Consulting.
For Bansal, an IIT-Kanpur alumnus like his cofounder Ashutosh Lawania, building processes was as important as growing the business. “I spent a lot of time initially putting the checks and balances in place,” says Bansal, who worked for seven years at a series of tech startups in the United States after a short stint at consulting firm Deloitte.
He returned to India and set up Myntra as an online retailer of customised apparel. His risk-taking ability came to the fore when three years later he switched his business model. That decision has paid off. Myntra is targeting sales of Rs 1,500 crore in fiscal 2015. “In 18 months, we want to become the largest fashion retailer in the country,” says Bansal. He defines his management style as consensus building. “I give my team a lot of freedom but I have high expectations as well,” says Bansal. “People should challenge me.” Bansal says delegating duties was difficult. He also believes in relying on data to drive his decision making.
“Mukesh is very determined and a complete team player,” says Sasha Mirchandani, founder of early-stage fund Kae Capital, who invested in the company in 2007. “He is among the top entrepreneurs in the country today.”
Flipkart (In the Rs 1,000 crore club)
The burden of being the founder and CEO of the most successful ecommerce startup in the country rests lightly on 32-year-old Sachin Bansal.
Seven years since its launch, Flipkart is now counted as the flag bearer of Indian ecommerce, selling everything from books to apparel and targeting $1 billion (Rs 6,200 crore) in sales next year.
The founders, Sachin Bansal and Binny Bansal (not related), have had to keep pace with this rapid growth. “We had to evolve quite a bit and unlearn some things,” says Sachin, an IITDelhi alumnus like his cofounder Binny. The duo worked at Amazon India before launching Flipkart out of a small flat in suburban Koramangala in east Bangalore. Today, the company’s 10,000-strong workforce is spread across over six offices and multiple warehouses.
Sachin says the biggest learning was to step back and not get involved with every decision. He says in the initial days the two founders were involved in every aspect of the technology platform. “That’s ok when the team is just 20, but when there are 300 people in the tech team we realised we were becoming bottlenecks,” says Sachin, whose firm today ships about one lakh orders a day.
To ensure fast expansion, the founders empowered their senior management team as well.
Being a good listener has also helped, says Sachin. “May be not having grey hair helps. People find it easier to give me feedback.” Such long-term vision has found Sachin admirers in the industry. Ravi Gururaj, chairman of industry body Nasscom’s Product Council, says Sachin is uniquely suited to deal with pressures that come with such success. “For someone who has experienced a meteoric rise to success and celebrity, Sachin’s humility and down to earth persona is refreshing,” he says.
Zomato (In the Rs 1,000 crore club)
Whenever IIT-Delhi graduate Deepinder Goyal likes the food at any new restaurant, he makes sure to collect or photograph its menu. It was this flair for pinning food menus at his office desk for ordering lunch that made the former Bain & Co associate start an online site called Foodiebay.com in 2008 with his colleague Pankaj Chaddah. Over a period of 1-2 years, the bundle of menus became so large that it took the form of a company, which in 2010 was funded with $1 million by Info Edge India, and was re-branded as Zomato.
Goyal, 30, continues his hobby, whether sampling pizzerias in Testaccio, Rome or Chinatown, New York.
Goyal loves to hire former entrepreneurs. “Entrepreneurs rarely complain about stuff, and are always in the state of fixing things which are broken,” says Goyal who has hired a former sports bar owner and Mckinsey associate for his New Zealand operations.
For hiring techies, he has a different strategy. For a week Goyal and his team takes care of a techie’s travel, stay and obviously food while he or she figures out work at Zomato. After a week, their fate is decided.
“My biggest learning is to always focus on hiring people better than yourself, empower them to take risks and give them enough space to make blunders.”
The startup was funded with $37 million (Rs 231 crore) last year, the largest such invesment in its category. Goyal wants to only focus on restaurant listings for now. He also has no qualms of letting go, whenever the time comes. “I would be more than happy to appoint a non cofounder CEO if the organisation needs it. This is not about me. This is about the team.”
Snapdeal (In the Rs 1,000 crore club)
It was denial of an H1B Visa to work in the US, while working for a software major, that led Wharton graduate Kunal Bahl, 31, to return to India to try his hands at a discount coupon business in 2008. The business pivoted into an online deal site called Snapdeal in 2010, which finally became an online marketplace in 2012.
Even while in the US, Bahl used to call up his schoolmate and IIT Delhi graduate Rohit Bansal, whowas working in Gurgaon, to discuss startup ideas. “Deep down, me and Rohit were never sure what we wanted to build. But we were certain of the fact that we wanted to become entrepreneurs,” says Bahl.
The determination to remain in the game has made Snapdeal pivot many times. And it finally hit pay dirt last year, when the biggest investors in the game such as eBay, Recruit Corp (Japan), Intel, amongst others pumped in about $50 million.
Bahl says his mission is to change lives of millions of small retailers in India via a technology platform. “We see ourselves as a socio-economic equaliser.” His close friend Bansal, also the COO of Snapdeal , credits the startup’s successful pivots to Bahl’s aggressive vision. “There’s a strong will in him to put the foot down on an idea,” says Bansal. He also says that Bahl’s hard working nature sees him stay often till 2 am in office.
Bahl, however, says his employees are better than him at their jobs. “My role is just to guide them. Startup CEOs should intervene only if there is a fatal error committed.” With over half a dozen investors in Snapdeal now, investor handling is another art which Bahl has learnt. “We have also tried to work wherever possible with investors who have been entrepreneurs before. The key is that all investors have to be aligned to a vision,” he says.