ANALYSIS. Arora: A surprise exit

Initial signals that all was not well with Nikesh Arora at SoftBank came in January when a clutch of unidentified investors sought his removal alleging past wrong doings and poor business decisions.

Though both Arora and SoftBank have denied these allegations, the timing of the exit is interesting. Arora, who had in an earlier interview to Bloomberg said he would be with SoftBank for the next 10 years, chose to quit a day after an internal committee of the company dismissed all allegations made by the investors.

One of the first things that Arora did after joining SoftBank was to focus on the Indian start-up ecosystem. Arora convinced Son to pump in about $210 million in taxi-hailing app Ola, followed by $627 million in e-commerce marketplace Snapdeal in the same month. In the last 17 months, SoftBank has committed around $1.5 billion in Indian start-ups, including Housing.com, OYO Rooms and Grofers. Though it’s still early days, some of these investments could be in trouble. Housing.com, for example, has lost its sheen after its founders quit the company.

According to industry sources, Snapdeal could also be under pressure after some exorbitant acquisitions, including FreeCharge and gojavas. The company, founded by Kunal Bahl and Rohit Bansal, had also laid off 40 per cent of its workforce and is struggling with raising fresh funds. Grofers, a hyper-local grocery app, has had to scale down in just within a year.

Serial investor Mahesh Murthy said Arora was a good salesman, but not a good investor. “Most of his investments are in a bad shape. He seemed to be clueless while pumping money into start-ups which were just a ‘me-too’ version of foreign players. May be this (Arora’s exit) is a good thing as SoftBank will be more cautious and invest small amounts in good companies, instead,” Murthy said.

Kunal Bahl, CEO, Snapdeal, disagrees. “Nikesh has been a great supporter and mentor to our business and we look forward to the same going forward as well. SoftBank will continue to provide financial and strategic support to our company and the transition at SoftBank will have no impact on our business,” Bahl said.

It was during his stint in Google that Arora met SoftBank founder Masayoshi Son, who was so impressed with Arora’s business acumen that he poached him with an annual package of ₹850 crore. The 48-year-old was even being touted as the successor to Son.

Arora had caught global attention when he joined the Japanese investment bank in September 2014 as the highest paid executive. But his exit from the company within just 17 months could be the kind of attention he would not have bargained for.

COMMENT NOW