Flipkart board asks CEO Kalyan Krishnamurthy to slash spending as monthly cash burn hits $40 million

Flipkart’s board, during a meeting last week, asked Chief Executive Officer Kalyan Krishnamurthy to slash the Walmart-owned e-commerce giant’s monthly cash burn by about half, as the company gears up for a potential public listing in India and explores shifting its holding entity from Singapore to India, people aware of the developments told Moneycontrol. 

The Walmart-owned firm currently burns around $40 million (about Rs 340 crore) each month and the board wants CEO Krishnamurthy to reduce that to about $20 million (around Rs 170 crore) each month over the coming quarters so the business becomes more frugal, one of the persons cited above said on the condition of anonymity.

Cash burn is the rate at which companies, especially startups and new-age firms, spend their capital to fund business operations. It is a critical metric to determine the health of companies that are not yet profitable, as it indicates how long they can sustain operations before needing an additional round of funding. The lower the burn, the better the health.

CEO Krishnamurthy has been tasked to cut the company’s cash burn to around $250 million a year, at a time when Flipkart has to become more aggressive with new business units, especially Flipkart Minutes, its quick-commerce arm.