Why Bansal may get a bigger stake in Ola than what $100 m warrants

Flipkart co-founder Sachin Bansal, who is in advanced talks to pump in $100 million in ride-hailing app Ola, is understood to be negotiating to get a larger stake than his investment is likely to get him.

He is also keen on getting a seat on the Ola board, which in all probability he is likely to get. The Ola board currently has nine members including the founders Bhavish Aggarwal and Ankit Bhati.

According to sources, Bansal who led the biggest buyout yet in the history of India’s fledgling e-commerce sector when he successfully sold a 77 per cent stake in Flipkart to Walmart for $16 billion, is looking to get a 5-7 per cent stake for his investment in Ola, which is more than the 2-3 per cent that he will get in the normal course.

This is possible because in addition to the amount of capital that an individual invests in his personal capacity, an extra stake can also be given out for intangible assets like the intellectual property that he/she brings to the table.

Strategic value

“The strategic value that the individual investor brings in with his IP, experience, his insights into what is likely to work and the network of stakeholders that he has first-hand access to, although intangible, can be quantified in dollar terms that can then be translated to a certain percentage of stake that can be given to him, in addition to the stake that his investment gets him,” a top executive from an early-to-late stage VC firm told BusinessLine.

‘Murthy of e-comm’

“Bansal is the Naranayana Murthy of e-commerce, a visionary who had the drive, passion and belief to succeed in getting people to shop online at a time when e-commerce itself was new to Indians,” said Sanchit Vir Gogia, Chief Analyst, Greyhound Research.

“He made history when he succeeded in getting Walmart to invest $16 billion for a majority stake in Flipkart. Ola's investors have everything to gain by giving him a seat on the board, as the company's valuation will most definitely go up with Sachin on board as a strategic advisor.”