India’s largest cab aggregator Ola is seeing a management rejig with its chief financial officer Rajiv Bansal and chief marketing officer Raghuvesh Sarup exiting the company, following the footsteps of other Indian unicorns such as Flipkart and Snapdeal.
In the last two weeks, Ola has replaced its first employee and chief operating officer Pranay Jivrajka with the appointment of former PepsiCo executive Vishal Kaul, and brought in Badri Raghavan as chief data scientist from Boston-based FirstFuel Software. Both Bansal and Sarup were with the company for little over a year. The company did not cite reason for their exits.
All three Indian unicorns are waging bitter battles against global rivals – Amazon with Flipkart and Snapdeal and Uber with Ola, losing market share and value over the last year. The Indian firms, who have struggled to raise fresh funds over the last year, have looked at bringing efficiency and rationalising costs to keep themselves afloat. Sachin Bansal, the founder of Flipkart and Bhavish Agarwal, the founder of Ola have also called for protectionism against what they call capital dumping by Uber and Amazon. Prior to that, Ola had played a nationalist card in trying to move the Karnataka High Court against Uber.
Flipkart has seen its value marked down by two third by US-based mutual funds Valic and Morgan Stanley from its peak of $15.2 billion, while Softbank, common investor in Snapdeal and Ola, has written off around $475 million in the value of its shareholding in the two companies.
In an attempt to bounce back, the Indian companies have shed high cost manpower and brought in professionals who have experience in large businesses. Last month, Snapdeal appointed Jason Kothari, who sold Housing.com to Newscorp-owned PropTiger as its chief strategy officer, while Flipkart appointed Tiger Global representative Kalyan Krishnamurthy to run the e-commerce company as its chief executive officer, elevating co-founder Binny Bansal as the Group CEO.
“All these changes which are happening are not normal in a company’s lifecycle. Founders and top management should be staying for a lot longer. The Flipkart founders stayed until now, but what was their contribution? Founders in these companies are more involved in raising funds rather than building their companies,” Harminder Sahni, founder and managing director of retail consultancy Wazir Advisors.
Bansal was brought in from India’s second largest software exporter Infosys to help Ola improve its books and raise fresh funds from global investors. He was tasked with putting together a war chest to fend off an aggressive Uber but did not see significant progress.
At Infosys, the management has been under scrutiny from founders and proxy advisory firms for the Rs 17.38 crore compensation given to Bansal, equivalent to over 24 months of severance pay. Infosys has denied any wrongdoing and also had commissioned an external audit of the transaction.