The Snapdeal and Flipkart Merger news is doing rounds from April 2017, but catching the momentum from July 2017 since Softbank Corp started to push for the merger aggressively.
Flipkart has been adamant to get the nod from all the stake holders in the Snapdeal including the minority ones to go ahead with the deal. This has vested quite a lot of power in the hands of the investors of snapdeal who account for number 30. The list of investors includes SoftBank Corp, Ru-Net Holdings, Tybourne Capital, Alibaba Group, Bessemer Venture Partners, IndoUS Ventures, Kalaari Capital, Saama Capital, eBay, Nexus Venture Partners, Intel Capital, and Singapore-based investment entity Brother Fortune Apparel.
Snapdeal’s seven-member board included SoftBank (holds two seats), Kalaari Capital, Nexus Ventures, Rohit Bansal, Kunal Bahl, and Akhil Gupta (Vice Chairman, Bharti Enterprises).
The minority shareholders including – PremjiInvest, Ratan Tata, Foxconn, Alibaba Group, Ontario Teachers’ Pension Plan, eBay, Temasek and Hong Kong-based hedge funds, among others – own about 40% of the company. But they do not have Board representation. The major questions being raised by the investors is the viability of the deal and the cause for the delay.
Though they have received a nod from Ratan Tata, they are still awaiting the nod from PremjiInvest and Ontario Pension Fund the report said. For the deal to get done a minimum of 75% of minority shareholders have to give nod.
Flipkart is led by Kalyan Krishnamurthy who has taken the reins of the company to his hands since the time he took up the role in May 2013, previously from Tiger Global Management. Flipkart has undergone a lot of changes in these 3 years.
Snapdeal is being driven to the merger by Softbank Corporation who is again investors. This is a classic example being set in Indian startup ecosystem where in investors taking the call and changing the course of the company and the founders are taking the backseat. The situation has raised from the fact that the companies were not able to scale up the growth chart as expected or agreed on getting external funding to the companies in earlier stages.