India’s largest e-commerce platform Flipkart.com has named co-founder Binny Bansal as its new chief executive officer (CEO), replacing Sachin Bansal, in a move that it claimed would strengthen its management bandwidth as it kick off preparations for an expected initial public offering (IPO) over the next few years. Flipkart said that co-founder and current CEO Sachin Bansal will now become executive chairman with immediate effect.
Mukesh Bansal will continue to be chairman of Myntra. He will continue to be head of the commerce platform at Flipkart and will now additionally run Flipkart’s advertising business, which was previously overseen by Sachin Bansal. He will report to Binny Bansal. Myntra’s chief executive officer Ananth Narayanan will also report to Binny Bansal.
The changes took almost everyone within and without the company by surprise. While there was a lot of speculation on the motivation, the following has been explained as the rationale. Sachin is expected to focus on fund raising and preparing Flipkart for an IPO. He will also look at doing strategic acquisitions, even large ones. Preparing the company for IPO is a very time consuming process and at the same time you can’t take your eye off the ball with Amazon snapping at your heels. This way, Binny can solely focus on running the company while Sachin can handle the strategic part and do deals.
Flipkart underwent a major reorganization last year when it split the company into three units. Last February, Flipkart gave Binny Bansal charge of its supply chain function while Sachin Bansal would look at new initiatives, chiefly advertising. The company’s core business of online retail and marketplace would be run by Mukesh Bansal, the Myntra co-founder who joined Flipkart in May 2014 when it bought the online fashion retailer.
Flipkart has raised more than $2.5 billion over the past 19 months and is currently valued at roughly $15 billion.