Flipkart: Realizing the India Opportunity

Today we’re witnessing a breakout moment for Indian entrepreneurship and its rapidly expanding consumer technology and retail sectors. The news that Walmart will pay approximately $16 billion for an initial stake of approximately 77 percent in Flipkart is, to put it mildly, monumental. The investment is one of the largest-ever acquisitions of a private, venture-backed company, and it’s a remarkable testament to what the Flipkart team has accomplished. More broadly, it’s just the latest example of ground-breaking global technology companies emerging from around the world.

A company of the sheer scale and value of Flipkart was nearly unimaginable back in 2008 when the Accel team first met Sachin Bansal and Binny Bansal, Flipkart’s co-founders. At that time, eCommerce was still at a nascent stage in India, and even organized retail barely held a toehold in what was a relatively small domestic consumer retail market. However, when we set up Accel’s $65 million seed and Series A fund in India (raised in 2008), unconventional and audacious businesses like Flipkart were exactly the kinds of companies we intended to back.

From a presentation to the Accel team in Palo Alto, 2010

We loved the vision of the founders and the idea of a transformational domestic consumer opportunity in India, and were taken by the founders’ penchant for constant innovation, experimentation, and ability to look at every obstacle as an opportunity. But we also realized that the company would need to be financed in a way as never before seen in India (and rarely elsewhere). Our original assumption was that the company would require ~$500 million in additional capital to reach break-even (we were definitely an order of magnitude off!). Realizing that immense challenges lay ahead but also believing in the opportunity, we decided to back these two extraordinary founders and invested $800,000 in seed capital.

In those early days, Sachin and Binny worked out of a makeshift office as they put together the beginnings of one of India’s first eCommerce businesses. One room was their warehouse, the second housed the tech team, and the third was customer support. One thing that still sticks with us is how they promised to usher in a revolutionary customer-first approach to their business, which, even though Flipkart has scaled thousands of times since, remains one of the core principles of the company even today.

As Sachin and Binny built the company, the opportunity to bring modern retail to the burgeoning Indian middle class proved to be more and more compelling. This vast, growing group wanted the convenience of purchasing all sorts of goods online and receiving them quickly, but were still faced with limited choices, even in large metros (online transactions at the time were still limited to buying airline or train tickets).

To address these challenges, Flipkart developed its own national logistics centers and delivery fleets (nothing existed commercially for consistent consumer delivery to date), ensuring a high-quality, end-to-end experience for any shopper. The company also found ways to make shopping convenient and worry-free by pioneering payment options like cash-on-delivery, credit/debit card payments at doorstep, and monthly installment payment facilities.

It takes rare qualities to surmount obstacle after obstacle on the path to becoming India’s largest eCommerce company with over 100 million customers and a product range more than 80 million items. The fearlessness to re-imagine the status quo (or to invent it where none exists) and the drive to continuously search for a better way — these are attributes that belong to people whom we describe as “originals.” Sachin Bansal and Binny Bansal have proven that they epitomize these qualities.

Over the years Flipkart’s momentum drew investors from around the globe to deploy capital and resources in support of the company as it sought to fulfill the founders’ vision. Since the beginning of Flipkart’s amazing journey in 2008, Accel has been a stalwart supporter of Sachin and Binny, the team, and business, investing across multiple India and U.S. venture and growth equity fund vehicles. In the ten years since we first wrote the initial seed check, Flipkart has become one of the largest, most visible, and most significant investments for Accel globally.

Flipkart’s success has led to dramatic growth in the Indian startup ecosystem too. We are big believers in the breadth of technology-enabled businesses in India, both business-to-consumer as well as business-to-business. We continue to be drawn to the creativity, vision, and determination of the founders behind companies like Acko, BookMyShow, BlackBuck, BlueStone, Collectabillia, Freshworks, Mitra Biotech, Myntra(eventually acquired by Flipkart), Portea, Swiggy, TaxiForSure(acquired by Ola), and more.

The Walmart + Flipkart announcement is yet another example of the vibrancy of the global innovation landscape. Flipkart — along with Atlassian, DJI, Spotify, Supercell and others — are part of an elite group of global technology pioneers that are worth over $10 billion. The successes of these companies reinforce our belief in our mission to find original talents, wherever they are, in their most early days. Then it is to dedicate ourselves to help channel their vision and drive to help them find their own path to greatness.

It has been our profound privilege to join in the Flipkart journey with Sachin, Binny, Kalyan, Mukesh (founder of Myntra), Ananth, and so many others across the Flipkart team. They have built a truly remarkable business from scratch, one that’s fundamentally reshaped the retail, payments, and logistics sectors in India, and globally too. Now with Walmart bringing its resources and know-how, we’re excited about what this combination and partnership will bring.