In an exclusive interaction, Sachin Bansal and Bhavish Aggarwal talk about their recently inked partnership and reveal what the deal means for them, why they’re invested in each other, and what’s next for Ola.Shradha Sharma
We’ve all read the news of Flipkart Co-founder Sachin Bansal, a highly revered name in the Indian startup circles, investing a sizeable portion of his fortune in fellow Indian entrepreneur Bhavish Aggarwal’s ride-hailing company Ola.
Sachin’s Rs 650 crores ($92 million) investment, worth more than 10 percent of his Flipkart fortunes (excluding taxes), is a significant display of confidence and commitment in Bhavish and his homegrown venture Ola, which is taking on global rival Uber, both in its home market and abroad.
Meeting the two entrepreneurs yesterday made me realise just how far the Indian startup ecosystem has come. From early 2009 to now in 2019, these founders have evolved into seasoned entrepreneurs. The duo have gone on from being “startup boys” at one time to venerable names in the global startup ecosystem, and along the way, created impact – shaping the narrative of the Indian startup ecosystem and building businesses that solve problems on a global scale.
Sachin’s Ola bet -- the largest domestic investment made by a single individual in an internet-focused company -- signals a tremendous level of faith and value being attributed to homegrown solutions being built by Indian businesses like Ola, for the world.
It also heralds the early signs of the next wave of investments that could define the Indian startup ecosystem: where seasoned Indian entrepreneurs take big bets on younger names creating solutions that generate impact.
Speaking about this landmark deal, Bhavish Aggarwal told YourStory,
“In the internet space in India, no such investment has been made. So, this is a big encouragement for everybody in Ola that Sachin is showing so much of faith and commitment to our journey. We are excited about what the future holds for us and also to learn from Sachin’s vision and beliefs.”
Ola, which has so far raised $3.5 billion, has marquee names like Temasek and Softbank as its investors. Sachin’s investment in Ola is part of an ongoing Series J fundraising round that could value the company at around $6 billion.
In a rare video interview with the generally media-shy poster boys of the Indian startup ecosystem, Sachin Bansal and Bhavish Aggarwal revealed what this deal means for them, why they’re invested in each other, and what’s next for Ola.
As an investor in Ola, Sachin says he is in it for the long-haul. He says,
“I am taking a long-term view with this Ola investment. Someone rightly said that if you think less than two years, it is all speculation; it is not really investing. Investing means, you have to be there.”
Until now, Indian entrepreneurs have relied heavily on foreign funds for large investments as they scale, and have decried the lack of domestic money available to support companies as they scale and take on global rivals.
So Sachin’s long-term commitment to Ola is a welcome change.
“I’m a big believer that in the long term, there will be a lot of value creation in this space. It is going to be very satisfying as much as entrepreneurship was very satisfying. This should be very satisfying to see an Indian company being created which is of global scale and global vision,” Sachin says.
Indeed, Sachin’s Ola bet is also a symbol of the personal connection that Bhavish and Sachin so clearly share – a relationship borne of mutual respect and affection, love for the entrepreneurial journey, and drive to create meaningful impact.
“We have been friends for a long time, since 2012 or 2013. We have met often since then. When I had some liquidity post the Flipkart event last year, it was an obvious choice for me to approach Bhavish to see whether he was interested in something like this,” says Sachin.
Sachin’s Ola investment also highlights just how important big exits are in the startup world to enable and support newer ventures.
Sachin raked in around $1 billion when he sold his stake in Flipkart, the online ecommerce company he co-founded with Binny Bansal, to Wal-Mart last year. He has already invested in several Indian startups, including healthtech startup SigTuple and edtech startup Unacademy, focusing on businesses building global solutions that deliver impact.
And Ola, Sachin says, was an obvious investment choice.
“I have seen Bhavish’s journey from the very beginning and seen him evolve as an entrepreneur. I’ve also seen the journey of Ola; it has gone through lots of ups and downs, faced many challenges, and solved many problems. So, it was obvious for me to see an opportunity here, and I am very grateful for this," he adds.
Calling Sachin an “icon and an inspiration,” Bhavish says his entrepreneurial journey began by taking inspiration from entrepreneurs like Sachin.
“I remember telling my parents of starting up on my own and they were very sceptical. But I gave them Sachin’s example. And after I got to know him, I could see Sachin’s big ambitious thinking and focus on execution. He has always been a source of inspiration. I believe this partnership will continue to create a lot more value,” he adds.
Sachin, who has already made around 12 investments in Indian startups, registered his holding company BAC Acquisitions in December. According to the filings with the Ministry of Corporate Affairs, Sachin holds a 99.01 percent stake in the holding company, which is reported to likely be used to make investments in early-to-mid-stage startups.
Speaking about his role as an investor vs entrepreneur, Sachin says he sees an 83 percent chance of starting up again, but expects to be more selective about his investments.
“I have been investing for a long time now. Moving forward, I’m going to make select investments in companies that are solving interesting problems. However, I am not becoming a full-time investor but the quantum has increased. My belief is stronger now, and Ola is a good example of that,” Sachin says.
Bhavish, who started Ola over eight years ago, says the biggest motivation for him and for entrepreneurs is the ability to create large-scale impact. Bhavish says,
“That has been the driving force for us -- changing and improving people's lives. Mobility and transportation is the core need for everybody and that is where a lot of money goes into. Our core focus has always been on how we can build the future of transportation by adopting modern technologies to create a much better experience for everybody involved.”
In India, Ola claims to have over 125 million users and over one million driver-partners. On an aggregate basis, it is said to be serving as many as a billion rides every year through its platform.
Sachin believes Ola, which made its first foray into international market last year, will very obviously be a “huge company run by a great team in a great space,” alluding to the massive potential for growth in the transportation sector.
He says, “If one steps back, when Flipkart started, the India GDP was $1 trillion; today, it is $3 trillion. So, we have come a long way. Indian tech companies will benefit hugely from this growth of the economy. The transportation sector is going to be massive and Ola is very well positioned.”
Ola, which expanded into Australia, New Zealand, and the UK, has also grown its presence in India to more than 110 cities, as rival Uber ramps up its focus on India, where the logistics industry is set to increase to about $215 billion in 2020, as per the Economy Survey.
"The stage we are in right now is very different. Now we have to think more long term. With the India business being more stable and sustainable, it gives us the opportunity to define mobility at the global stage."
Going global also comes with the challenge of thinking differently as markets are different everywhere, so “...at every stage, there is a challenge, but it is also an opportunity,” he says.
But the challenges notwithstanding, the opportunity to leverage technology to create change and impact for the long-term is something Ola takes pride in.
“We always aim big, think long term, and leverage technology. India can actually leapfrog the world in new age technologies and business models. We have always built for the future but there will some blips in the short term. The core of Ola has always been long-term value creation,” Bhavish says.