Indian-American angel investor and entrepreneur Kanwal Rekhi, who is credited as being the “first Indian-American founder & CEO to take a venture-backed company public on the NASDAQ”, has heavily criticized Flipkart in an interview to Entrepreneur.
“Flipkart was the biggest and most foolish [Indian startup],” Rekhi says in the video above. “Flipkart was hiring people, paying them Rs 2 crore, Rs 3 crore, Rs 4 crore salaries, they were selling products below their cost, they had no business models, and it is the venture capitalists who were encouraging them to waste their money, they caused it as well, not just the entrepreneurs.”
“The founders of Flipkart and Ola were selling their own shares in secondary markets,” begins Rekhi explaining, why he knew the startups were “doomed to fail from day one”. “And they were diversifying away from their own companies. They were telling me that did not believe in their own companies. They knew their company best and they were selling those shares so these are not the entrepreneurs that everybody should look up to.”
Rekhi also says govt should let companies fail, because bailing them out, sets a bad precedent for others.