All talk, no shop: Flipkart-Snapdeal and other startup deals that never saw the light of day

In what turns out to be one of the biggest deals in India's e-commerce space, US-based retail giant Walmart announced it was acquiring 77 percent stake in domestic e-tailer Flipkart for a valuation of USD 20.78 billion.

The Flipkart-Walmart deal puts an end to about 8 months of rigorous negotiations and deliberations, during which Flipkart had bought back shares of 100 stakeholders for USD 350 million in a bid to regain the status of a private limited company.

While Walmart is offering lucrative exits to stakeholders and founders of Flipkart, not every company in the startup ecosystem gets to enjoy such a destiny.

Here's a list of the much-talked-about deals in the startup space that eventually never saw the light of the day:

Flipkart-Snapdeal

Today's acquiree was then the acquirer. Snapdeal’s lead investor SoftBank was trying to sell the company to rival Flipkart. The downturn for Snapdeal started sometime in end-2016 when the investors showed reluctance in putting more capital. Thereafter, retrenchment exercises at Snapdeal began. Until February 2017, Snapdeal was determined to go ahead with a lean organisational structure focusing only on its core businesses.

It didn't take much time for SoftBank to start pushing the two founders of Snapdeal to sell the company to Flipkart.

The deal was seen as completely orchestrated by investors with the founders having little skin in the game. However, as the days passed the reluctance of the founders was quite visible. The company rejected the first offer of ~USD 550 million made by Flipkart in July 2017 as it was much lower than the expected valuation.

Talks eventually crashed in August with Snapdeal decided to go solo much to the discomfort of investors.

Jabong-Snapdeal

Prior to the promoters of Jabong deciding to sell off the company at a discounted valuation of USD 70 million, the e-tailer had been in talks with Snapdeal for an acquisition. In July 2016, even as Snapdeal's management was evaluating and reconsidering their offer, Flipkart acquired Jabong allowing no time for competitors to make a counter offer.

While USD 70 million was a low valuation, the promoters of Jabong, Kinnevik and Rocket Internet were unperturbed as there was some closure to their investment in the company.

Snapdeal was said to be one of the biggest losers, given that Jabong’s fashion presence could have benefited the Kunal Bahl-led firm. In turn, the deal gave Flipkart a clear majority with three fashion brands — Flipkart Fashion, Myntra and Jabong under its umbrella.

Flipkart now claims to be holding about 70 percent of the overall online fashion market in the country.

Uber-TaxiForSure

Before Ola acquired fellow cab aggregator TaxiForSure — leaving the sector in a state of oligopoly — Uber was a big contender.

The fallout of the rape case involving an Uber driver in Delhi impacted TaxiForSure in a big way. The incident happened at a time when TaxiForSure founders Raghunandan G and Aprameya Radhakrishna were meeting investors to raise fresh funds. The subsequent Home Ministry ban on cab aggregators in Delhi made investors wary of the sector.

After multiple failed attempts to raise capital and depleting cash reserves, the founders finally succumbed to pressure and decided to sell TaxiForSure and reached out to Ola and Uber.

Uber’s rationale for lean organisational structure at TaxiForSure meant the possibility of job losses. At the time Uber had less than 1,000 people working for them globally, according to a media reports, while TaxiForSure had a little less than 2,000 employees in India itself. Although many other factors favoured Uber over Ola, the founders took a stand and talks soon ended. Eventually, Ola acquired TaxiForSure for USD 200 million in March 2015.