Has the exit scene in India evolved? What were the top 10 corporate exits of 2020?

Not just startups, IT companies, banking, and retail sectors too witnessed a massive shake up due to the pandemic last year.


Poet Thomas Stearns Eliot OM once famously quotes: “What we call the beginning is often the end. And to make an end is to make a beginning. The end is where we start from.”

Blame the year for the start of the coronavirus, or the economic slump due to the pandemic, 2020 was one of the tragic years for many reasons. The Covid-19 has been affecting many business houses, which triggered a shortage of raw material, hit consumption and impacted pre-agreed deadlines. Leading to this situation, many companies and marquees have been exploring different routes to move ahead.

Taking an exit route would surely be a nightmare to any entrepreneur or business leader. When an entrepreneur starts a business, he or she never dreams to exit the market unless something sudden happens. There are surely unavoidable situations in life when you are bound to bend yourself to get things right. To avoid such bumpy rides, it is always better to start the business with an open mind or should have plan B in mind to take things smoothly.   

According to a data, the year 2020 witnessed over 70 per cent of upstart tech companies failed. This was mainly around 20 months after they first raised around $1.3 million in total funding or couldn’t go beyond seed or series A funding. Generally, exits happen at an initial stage for small, undisclosed sums.  Similarly, for consumer hardware startups, the stats are even brutal. Around 97 per cent of seed or crowdfunded companies are eventually dying or becoming zombies. Also last year, India registered a sharp 44.4 per cent decline in the total number of tech start-ups being founded at 3,061, compared to 5,509 in 2019.

Last year, the Covid-19 pandemic and global lockdown took a toll on the hospitality industry. Several short-term rental and travel startups were forced to wind down their operations. Fashion and media companies also lost customers and cash as consumer spending pulled back and investor appetite waned. However, some of these failed companies were already in their death bed, from over-promised software to stiff competition to shady business practices. For shutting down of most of the companies, the pandemic and the lockdown proved the final nail in the coffin.

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Blame the year for the start of the coronavirus, or the economic slump due to the pandemic, 2020 was one of the tragic years for many reasons.

Failure is an inevitable part of success. Even Bill Gates, who is one of the most successful businessmen in history, didn’t rocket straight to the top with Microsoft. It’s not a well-known fact that his first company was a bust wasn’t a roaring success. Rather it was seminal in preparing him to make Microsoft’s first product a couple of years later. If an entrepreneur is unable to build a business as a standalone profitable organization or he is unable to generate the kind of funding needed for a business, then there is no disgrace in exploring other options such as mergers, acquisitions, stake sale, or sell-off.  Sometimes a small company can prove a stepping stone in the big organization, and benefit all the shareholders.   

In startup, there are a number of visionary milestones to look for. However, the last goal for startups is an exit strategy that benefits all who are associated with the company – the founders, investors, employees, advisers, and customers. Exits are important for the startup ecosystem because investors get returns and venture capital money can flow back to support new entrepreneurs. The Walmart-Flipkart deal did a lot in that, but mid-sized deals are just as crucial as outliers.

In May 2020, Indian startups have secured around 68 per cent and 33 per cent less funding, when compared to the year-ago period in 2019 and 2018, respectively. In a return, this has affected valuations and cash flow of startups of all sizes, thus pushing them to seek more harsh measures such as mass layoffs, pay cuts, freezing promotions, salary reduction, unpaid leave for indefinite period, shutting specific departments or branches and salary hikes. A survey conducted by the industry body’s NASSCOM showed that 70 per cent of startups have less than three months of cash runway due to the sudden outbreak of the pandemic. The survey also found that around 40 per cent of startups have either temporarily shut down operations or are in the process of shutting down.

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Exits are important for the startup ecosystem because investors get returns and venture capital money can flow back to support new entrepreneurs.

Layoff Due to The Pandemic

Due to the worsening situation, ride aggregator Ola laid off 1,400 employees by May 2020. Even its senior management had to take significant salary cuts to avoid such a situation. Curefit axed 300 trainers, mostly access staff, who were hired for future extension from smaller towns. The Bengaluru-based Foodtech firm Swiggy took steps towards growth and reducing cost at the same time. It laid off 1,100 employees. On the same side, Paisabazaar and BookMyShow reduced 1,500 and 1,450 jobs, respectively. Similarly, Udaan gave pink slip to over 3,000 contractual staff.

Not just startups, IT companies, banking, and retail sectors too witnessed a massive shake up due to the pandemic or in a move to restructuring the companies’ management. IT companies does restructure and laying off for the past two years in light of new technology that has emerged; more positions in the IT industry are being rendered useless due to automation. Similarly, retailer sector has been battling low sales due to an unprecedented pandemic that has severely hurt fashion brands. This triggered the downsizing process and reshuffling with the start of the Covid-19 pandemic.

But the worst came, when businesses started shutting down all over the country, and companies started losing their top brasses. With expenditures racing ahead of revenue and a complete lockdown plugging all access to liquidity also spelt the worst for micro, small and medium businesses and their low-salaried workers. Only by the year end, the hiring scenario improved. EdTech and fintech startups started hiring by the end of the year.

Corporate Exits in 2020

The year 2020 saw some of the significant corporate exits almost in all major sectors. Some shifted gear amid ugly corporate battles or business crises, while few made a swift exit move for better future possibilities. Here are the top 10 high profile corporate exits of 2020:

Ankit Jain

Ankit Jain, Co-founder, Ola Electric and one of the closest confidants of CEO Bhavish Aggarwal, resigned from his position. Jain is the second co-founder to quit Ola Electric after Anand Shah. Shah was the first one to quit in 2019, immediately after the fundraise from SoftBank. The fledgling electric-mobility division of Ola has been struggling with back-to-back CXO exits. Jain had joined Ola in early 2016 from McKinsey & Co and had previously served as VP and Head of Ola Play. Along with this exit, the nine high-profile departures the company witnessed in 2019. 

Rahul Jaimini

Rahul Jaimini, along with Sriharsha Majety and Nandan Reddy, co-founded Swiggy in 2014 and served as the Chief Technology Officer of the company. Jaimini is leaving the company to join Pesto Tech, where he had invested earlier. While Jaimini will no longer be involved in day-to-day responsibilities the online food ordering firm, he will continue to be a board member and a shareholder at the company. Functions led by Jaimini included platform engineering, analytics, IT, and Swiggy Labs.

Pravin Jadhav

Pravin Jadhav, Managing Director and Chief Executive Officer of Paytm Money, resigned from the company after his clashes with the company. Differences over ESOPs, annual salary and remuneration had led to his departure from the company. Paytm’s wealth management platform had elevated Jadhav as MD and CEO in September 2019. Jadhav’s resignation was considered not a good sign for Paytm as the company had been facing exodus at the top level since 2019. Paytm Money is the wealth management subsidiary of Paytm, and Jadhav was the first team member on the board of directors. This came at a time when the company was looking to expand its market for Paytm Money with mutual fund services.

Rohan Mishra

Rohan Mishra, who was the India head of Helo, left the company in July to become the director of government relations and public advocacy at Coca-Cola. Nitin Saluja, ByteDance’s director of public policy until August, is now Amazon India’s senior manager, public policy. After the ban on both of ByteDance’s top apps, TikTok and Helo, a number of senior executives walked out of the door.

Karan Bajaj

Karan Bajaj, founder of coding edutech startup White Hat Jr, one day got a WhatsApp message from Byju’s co-founder Byju Raveendran saying that he really admires how Bajaj has built the company. They chatted and the very next day a $300-million deal was announced. Byju’s acquired Bajaj’s less than 18-month-old White Hat Jr for an all-cash deal. Bajaj being one of the major shareholders of the company made a sweet fortune, and the investors also got a great exit.

Uday Shankar

Uday Shankar, Chairman of Disney Star, made an exit from the company in September 2020. Around 40 employees from its film production business, Fox-Star Studio, also made the move the same day Shankar resigned. Similarly, other high-profile exits happened in the company’s sports business also. The Star Sports CEO Goutam Thakkar, marketing head Rajiv Mathrani, head of emerging sports Rupali Fernandes and business head of regional sports business Ashok Namboodiri, all resigned on the same day.

Ramkumar Ramamoorthy

After spending 22 years in the company, Ramkumar Ramamoorthy resigned from Cognizant Technology Solutions Corp. as Chairman and Managing Director. In September 2019, Ramamoorthy had been elevated to the position of CMD, and he also served as a director at the Cognizant Foundation, the CSR arm of the tech firm. Several other senior vice presidents and vice-presidents had also resigned in recent years including Jaideep Poondir, Rajesh Balaji, Vinayambika Kidiyur, Archana Ramanakumar, and Vikash Gaur. The reason for the exits was unknown, but industry sources believed the company wanted to refresh the top-heavy structure and make it more efficient.

Janne Einola

Janne Einola, India head of Hennes & Mauritz (H&M), exit the company five years after he launched the world’s second-largest fashion brand in India. Citing personal reasons to leave the company, Einola took a break before deciding on his next move. His departure comes at a challenging time when retailers in India are grappling low sales due to an unprecedented pandemic that has severely hurt fashion brands.

Ankhi Das

Ankhi Das resigned from the Facebook India’s policy head position last year after she was accused of not applying hate speech rules to posts by the Bharatiya Janata Party members. The troubles between Facebook India and Das mounted after the social media giant got involved in back-to-back controversies with the Central and Delhi governments.

Rajiv Lall

After five years IDFC First Bank got banking license, Rajiv Lall resigned from his position. The former founder managing director and chief executive officer of the bank cited personal reasons for his exit

Preeti Verma
Preeti Verma
An alumna of IIMC, Preeti writes on global and domestic business, life cycle of a business and its stages. Her fourteen years of stint includes The Economic Times, Business Standard, Financial Express, Tehelka, Businessworld and Times Internet.

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