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The redBus sale: A cautionary tale – Mint

by Mihir Dalal and Ashish K. Mishra

Bangalore/Mumbai: If you are the founder of a start-up or work in a start-up, then this story is for you. If you hope to ever go down that path, keep reading. Because what happened at redBus—yes, redBus, the whale of a start-up success story of the last few years—could happen to you.

To your company.

To your people.

And if and when that happens, then you need to know what to do.

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Or what not to.

This cautionary tale, pieced together from interviews with multiple executives at redBus, investors and other people familiar with the matter, many of whom didn’t want to be named, begins in June 2013 when the bus ticketing website was acquired by the Ibibo Group, a subsidiary of South Africa-based media firm Naspers Ltd, for $135 million. Back then, it was a big deal, a celebrated story. It still is. Except that within weeks after signing on the dotted line, the co-founder of redBus, Phanindra Sama, found himself in a rather humiliating situation. It all started when he was feeling on top of the world, when he was on a holiday in London with his parents who’d never been abroad before. And since he wasn’t hoping to do any work, Sama didn’t care to get a local SIM card. So there was no one bothering him with calls or emails. That is till he landed in Bangalore. And switched on his cell phone.

In the 10 days he had been away, all hell had broken loose. Alok Goel, the company’s chief operating officer (COO), had put in his papers. So had Satish Gidugu, the company’s chief technology officer. Goel wasn’t the only one who had resigned; three mid-level managers had, too. At the company’s headquarters in Bangalore, the scene was one of total chaos, of anxiety and anger— towards Sama, and Ibibo taking over.

Read the entire story at Mint.

Copyright © 2014 HT Media. This excerpt has been crossposted with permission from Mint.

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