Ola CFO, CMO quit a day after SoftBank write-off

Part of trend in Indian unicorns of senior execs being replaced with experienced professionals

India’s largest cab service aggregator, Ola, is seeing a management rejig. Chief Financial Officer Rajiv Bansal and Chief Marketing Officer Raghuvesh Sarup are exiting the company.

A similar trend has been seen at unicorns (jargon for companies with a market valuation exceeding $1 billion) Flipkart and Snapdeal.

In the past two weeks, Ola has also replaced its first employee and Chief Operating Officer Pranay Jivrajka, with former PepsiCo executive Vishal Kaul. And, brought Badri Raghavan as chief data scientist from Boston-based FirstFuel Software. 

Both Rajiv and Raghuvesh were with the company for a little over a year. The company did not cite a reason for their exits.

All three Indian unicorns are waging intense battles against global rivals - Amazon with Flipkart and Snapdeal, and Uber with Ola. In the process, losing market share and value over the past year. The Indian companies have struggled to raise fresh funds over the year, have looked at bringing more efficiency and rationalising of costs.

Sachin Bansal, founder of Flipkart, and Bhavish Aggarwal, founder of Ola, have also called for protection against what they call ‘capital dumping’ by Amazon and Uber.  Prior to that, Ola had played the nationalist card in trying to move the Karnataka High Court against Uber.

Flipkart has seen its value marked down by two-thirds, by US-based mutual funds Valic and Morgan Stanley, from its peak of $15.2 billion. SoftBank, common investor in Snapdeal and Ola, has written off $475 million in the value of its shareholding in the two companies. 

In an attempt to bounce back, the Indian companies have shed high-cost personnel and brought in professionals with experience in large businesses. Last month, Snapdeal appointed Jason Kothari, who sold Housing.com to News Corp-owned PropTiger, as its chief strategy officer. Flipkart appointed Tiger Global representative Kalyan Krishnamurthy to run the e-commerce company as chief executive officer (CEO), elevating co-founder Binny Bansal as the Group CEO. 

“All these changes are not normal in a company’s lifecycle. Founders and top management should be staying for a lot longer. The Flipkart founders stayed until now but what was their contribution? Founders in these companies are more involved in raising funds than building their companies,” says Harminder Sahni, founder and managing director of retail consultancy Wazir Advisors.

Rajiv was brought from India’s second largest software exporter, Infosys, to help Ola improve its books and raise fresh funds from global investors. He was tasked with putting together a war chest to fend off an aggressive Uber but did not see significant progress. 

At Infosys, the management has been under scrutiny from its founders and from corporate governance advisory firms for the Rs 17.38-crore compensation given to Rajiv, equivalent to over 24 months of severance pay. Infosys has denied any wrongdoing and had also commissioned an external audit of the transaction.