Tightening The Purse Strings

Why Ratan Tata’s $300-million fund with University of California, a prolific series B and C investor in some of India’s most high-profile startups till recently, has stopped for a breather.

- Sayan ChakraBorty

It was 2014, a year of many firsts for India’s fledgling startup universe. Breakneck growth at any cost was the order of the day, effected by a battery of benevolent investors. Amid all the din, Flipkart, the consumer internet poster child, had already secured the bragging rights to two significant firsts— it became the first homegrown ecommerce company to clock $1 billion in gross sales and snare $1 billion in a single funding round.

Cross-country rival Snapdeal, engaged in an audacious land grab with Flipkart and Amazon, wasn’t far behind. While Flipkart founders Sachin Bansal and Binny Bansal basked in the glory of accomplishing unprecedented business goals, Snapdeal’s Kunal Bahl and Rohit Bansal possibly met a life goal—an endorsement from Ratan Tata.

It wasn’t just a public acknowledgement of Snapdeal’s business, or a private audience with Tata, laced with words of wisdom. Snapdeal became the first Indian startup to raise money from the chairman of Tata Trusts. The money, 10 crore, was paltry for an ecommerce company shrouded in gargantuan losses and burning hundreds of crores of rupees every month to wrest market share from competitors. Tata’s money was not meant to bolster the war chest. It was a matter of sheer pride for an upstart such as Snapdeal.