Sachin Bansal: From IIT to Becoming an Ace Investor
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After selling his about 5.5 per cent stake in Flipkart for more than $1 billion, Sachin Bansal has not looked back.
The Flipkart co-founder has his hands full with investments in electric scooter manufacturer Ather Energy, and bike-rental firm Vogo, among others. The latest addition to his investment portfolio is Wadhawan Global Capital’s DHFL General Insurance. Last week, Bansal reportedly acquired Kapil Wadhwan’s entire stake in the insurance company, which was facing bankruptcy proceeding.
But the road to becoming an ace investor has not been easy. After graduating from the Indian Institute of Technology (IIT) in Delhi in 2005, Bansal had a stint with Amazon.com Inc.'s Amazon Web Services where he served as a senior software engineer.
The Amazon stint last for more than a year, after which Bansal, with his co-founder Binny Bansal (not related), launched Flipkart. The start-up, which is Amazon India's rival, was founded almost 11 years ago, out of an apartment in Koramangala, currently Bengaluru’s start-up hub. The company was launched when Indian the start-up market was still emerging. Not many people in India knew about online shopping, marketplace or even e-commerce. Started by selling books, Flipkart today sells almost everything.
Cash on delivery, which is an integral feature for any e-commerce website, was popularised by Flipkart to cater to the masses, who prefer transacting in cash over credit cards. The innovation, though capital intensive, helped the e-commerce giant gain foothold in India.
The Flipkart team was experimenting and advertising, which required huge funds. Despite showing potential to take over the Indian e-commerce market, investors were not showing much interest until Tiger Global Management’s investment. In 2009, the American hedge fund’s Lee Fixel made an early investment in Flipkart and poured in at least $1 billion over the years. Tiger Global's investment in Flipkart unleashed a funding boom in Indian start-ups.
Tiger Global Management has reportedly reaped about $3 billion after Walmart Inc., America's largest retailer, bought about 77 per cent stake in the stagnating company. The Walmart acquisition put Indian start-ups on the global map along with Flipkart.
Since his exit from Flipkart, Bansal has been making dynamic investments along with diversifying his financial portfolio. In 2019, he reportedly invested about $100 million in Bhavish Aggarwal’s Ola, a cab-hailing services owned by ANI Technologies Pvt. Ltd. Bansal’s investment was seen as a move that would strengthen Aggarwal’s position against Masayoshi Son’s SoftBank. Son-led investment firm was an early backer of Ola and wanted to increase its stake to more than 40 per cent.
In less than a month, non-banking financial institutions (NBFCs) Indo Star Capital Finance Ltd, and Altico Capital Ltd received INR 250 crore in debt from Bansal.
Scooter mobility start-ups, a sector which has been receiving interest from prominent investors, did not miss Bansal’s eye. In May, Bengaluru-based Bounce (formerly known as Metrobikes), and Vogo received $3 million each in debt from Bansal. As cities are becoming populous and congested scooter rentals are seen as the latest way to get around.
As far as two-wheeler vehicles are concerned, electric vehicles cannot be discarded. Ather Energy, a seven-year old, electric scooter producer received $32 million from Bansal in May 2019. He has also been an angel investor in the firm in 2014. Grocery delivery start-up Milkbasket and pharmaceutical company Piramal Enterprises received INR 20 crore and INR 200 crore, respectively, in debt from Bansal.
When Bansal sold his stake in Flipkart, he did not seem very happy about it. But as time has unfolded, the billionaire investor has much more to look forward to.