As trial balloon launches go, it should’ve been a perfect launch plan. The location would have brought together a phalanx of powerful policy-makers, business leaders and influencers including the chairman of India’s telecom regulator, its foreign secretary, the ministers of technology and industry for the state of Karnataka and dozens of powerful CEOs, researchers and technologists. A successful launch would have the kind of visibility and impact few could hope for.
No expenses were spared either. Sponsorships were paid for. Panellist slots were obtained.
And then, on 7 December 2016, the balloons were floated.
“What we need to do is what China did 15 years ago and tell the world we need your capital, but we don’t need your companies,” said Sachin Bansal, executive chairman and co-founder of Flipkart, India’s most valuable e-commerce startup and market leader.
He was followed by Bhavish Aggarwal, co-founder and CEO of Ola, the largest on-demand cab ride provider and market leader, “It’s much easier for non-Indian companies to raise capital because they have profitable markets elsewhere. You might call it capital dumping, predatory pricing or anti-WTO but it’s a very unfair playing field for Indian startups.”
In case the subtext wasn’t clear, the founders of two of India’s best-known unicorns were asking the government for protection from competition through regulation. The event was the Carnegie India Global Technology Summit that was held in Bangalore on 6-7 December 2016.
Three days later came the first flanking argument.
On 11 December, Tarun Davda, a venture capitalist in the firm that has backed Ola (Matrix Partners), wrote a long post where he took great pains to explain that Ola and Flipkart’s foreign competitors were indulging in a “dubious strategy [that is] considered anti-competitive in many jurisdictions and is illegal under competition laws.”
According to Davda, “Simply put, their argument is that global rivals are indulging in an unhealthy market practice known as ‘capital dumping’.”
That was the second instance of the term after Ola’s Aggarwal introduced it at the Carnegie event.
Then, after a slightly longer gap, came the second flanking post. On 30 January, Vani Kola, a VC at Kalaari Capital, who has invested in companies like Snapdeal and Myntra, wrote a post on Medium. In her post, Kola repeated Davda’s argument about capital dumping and said that “[Amazon, Uber and OLX] have access to unlimited finance—from the fact that they have successful business for many years in other geographies—and can use that to stifle competition in India by providing products and services that are economically unviable even to them in the long term (but a loss that they can take on, because of the cushion from their home markets). While it might seem to be a good deal for the customers, it can be a bad deal for the country as a whole.”
Reference number three to ‘capital dumping’.