Mukesh Bansal (39) and Ashutosh Lawania (37), who founded online fashion retailer Myntra.com in 2007 with Rs 50 lakh, will be worth a combined Rs 427 crore when India’s largest e-commerce firm Flipkart.com completes a deal to buy their company in six weeks.
A highly placed source actively involved in the negotiations told HT on condition of anonymity: "Myntra is being valued at $350 million (about Rs 2,135 crore). Flipkart will buy a little more than 50% of the company."
The brand will be retained as an exclusive fashion retailer. Flipkart and Myntra declined to comment on the development.
Bansal and Lawania, both IIT-Kanpur alumnus, who own about 20% of Myntra.com, will continue to run the company even after Flipkart.com takes it over. Their individual shareholdings were not available. Two other co-promoters have left the company.The deal will give Myntra.com’s 400 employees, who own about a sixth of the company’s equity, about Rs 350 crore and turn many of them into dollar millionaires. The deal will fill a critical gap in Flipkart.com’s product portfolio and give it heft to take on Amazon.com, the world’s largest e-commerce firm, which is targeting the Indian market.
"Mukesh and Ashutosh are low-key guys — workaholics who avoid high profile parties and shun extravagance. This money is unlikely to change them," said a friend from IIT, who now works for a Big Three IT (TCS, Infosys and Wipro) firm.
Prior to launching Myntra.com, Bansal, who began his career as a systems analyst at Deloitte Consulting in 1999, spent about eight years working for four start-ups in the US, two of which, he has admitted in the past, didn’t take off.
"Most of the negotiations are over. But getting everyone to agree to everything is taking time," said another person close to the development, expressing confidence that all the loose ends would be sewn up in six weeks.
New York-based Tiger Global has 35% stakes in both Flipkart.com and Myntra.com. Another common investor, Accel Partners, owns 10% in each of the companies. Flipkart.com and Myntra.com have other investors like Kalaari Capital and IDG India Ventures.
Interestingly, Wipro chairman Azim Premji, who recently bought a 10% stake in Myntra for Rs 150 crore, will see the value of his investment rise to Rs 210 crore in less than six months.
The deal is expected to kick off consolidation in the highly fragmented e-commerce space in India and lead to the emergence of a few strong players.