Flipkart’s Summer Of Discontent

by · Inc42

SUMMARY

  • Flipkart’s senior exits and ESOP liquidity concerns are adding to its IPO uncertainty as Walmart pushes for profitability while the ecommerce giant continues investing in quick commerce and food delivery.
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Questions over an IPO and ESOPs, huge investments in quick commerce and food delivery and the pressure to deliver profits: Flipkart is juggling one too many hot potatoes for the past year. 

In that time, the ecommerce giant has seen 14 senior level exits, including three more VPs who are set to leave the company next. 

The latest executives to leave are Kanchan Mishra, VP of smartphones; Amit Sachan, VP of product and tech; and Kamal Chopra, VP of corporate, as Moneycontrol reported. While Mishra spent more than a decade at Flipkart, Sachan and Chopra have been with the company for four and five years, respectively. 

As their tenure shows these are not employees who had just joined the company one or two years ago in the wake of all the IPO talk. These were executives who had seen much of the restructuring at Flipkart in the post-pandemic years.   

Plus, these departures come at a time when the company’s employees have raised concerns over ESOP liquidity and the company’s long-awaited IPO remains without a firm timeline. It has coloured these exits with a darker tint as a result. 

Walmart has reportedly asked the company to prioritise profitability before going public, while the expansion of its quick commerce business, Flipkart Minutes, requires significant ongoing investments. Employees holding stock options, meanwhile, are waiting for an opportunity to cash out. 

Sources told Inc42 that some of these executives left as they were unable to see a clear opportunity to liquidate their ESOPs, while others moved to new jobs or wanted to start their own ventures. It must be noted that at this middle management level, Flipkart has around 30 executives in VP roles and more than a dozen senior vice presidents, so these departures will not necessarily destabilise the company, but it is a sign of bubbling discontent.   

ESOP Liquidity Dispute Widens 

In fact, sources told us that the frustration over stock options has moved beyond internal discussions, with former senior executives approaching Walmart’s board to seek a fair opportunity to realise the value of their vested ESOPs.

Earlier this month, former Flipkart executives, including ex-Myntra CEO Mukesh Bansal, former chief business officer Ankit Nagori and former CFO Sanjay Baweja, wrote to Walmart’s board seeking fair treatment and a full cash-out opportunity for their vested options simply because they left the company. 

The issue has gained importance because an IPO has long been seen as a potential exit route for employees holding Flipkart shares or options. With the listing pushed back, those employees have little clarity on when they can realise that value. 

For senior executives who have spent a year at Flipkart, the delay also affects decisions about whether to stay or pursue opportunities elsewhere. While ESOP liquidity is one reason behind some departures, the company’s leadership churn is also a result of executives moving into new roles or setting up their own ventures. 

The founder of a unicorn startup with over 30,000 employees told us that while Flipkart has the responsibility of providing liquidity to employees, listing in a hurry to meet these demands would be a mistake.