Born To Race

How will Flipkart, the internet company from India backed by $7 billion of venture capital, be remembered? As a tech startup that solved problems at high velocity.

- Kunal Talgeri

“I know you’ve taken it in the teeth out there, but the first guy through the wall. It always gets bloody, always. It’s the threat of not just the way of doing business, but in their minds it’s threatening the game.”

These are lines uttered by baseball team Boston Red Sox owner John William Henry II in the film adaptation of Michael Lewis’s book Moneyball. Henry says them to Oakland Athletics general manager Billy Beane, who became the face of selecting baseball players and framing strategy based on data, and was immortalised in the book. Data helped Beane build a playoff team for $41 million. In Henry’s words, “You won the exact same number of games that the (New York) Yankees won, but the Yankees spent $1.4 million per win and you paid $260,000.”

In the literal sense, India’s most valued internet company Flipkart has hardly followed Beane’s sense of economy. It raised more than $7 billion capital in eight years to build an ecommerce company, which clocked net sales of $4.6 billion in fiscal year 2018. This is considered sacrilege in India, where the purpose of business is to generate profits—make money.

Last week, when Walmart paid $16 billion to buy out Flipkart in a deal valued at more than $20 billion, it made founders Sachin Bansal and Binny Bansal billionaires. However, since late 2009, when private equity investor Tiger Global infused $10 million in Flipkart, they have had to take it in the teeth for one reason: They chose to build Flipkart at high velocity. They were the first guys through that wall.

In the process, they would break more than one rule in retail, as India Inc has known, because Flipkart started out as an antithesis.