FreeCharge founded by Kunal Shah is one of the most popular online mobile recharge sites in India with their tag line- Lo Do Khatam Karo (Split your bill and pay) started out with recharge only mobiles but has expanded and offers recharge of TV and Data card as well. FreeCharge was the forefront of the ‘Coupon revolution’ that took India by storm.
Mobile telephony has grown up in India from the costly days in 1996 to today when per sec calls cost only ½ paisa. After mobile revolution, recharging became the critical business and it was widely dominated by offline physical stores. This was a great business opportunity which was caught by Founder of Freecharge Kunal Shah. Freecharge is an online portal which provides service of online phone recharging and give the customer discount vouchers of different brands of same recharge value. Recharging your mobile phone was never better than this. It not only eased up out life in mobile recharging but also in expanded its services towards DTH, Data Card and Electricity, Landline, Gas bill payments. Recently it added the service to buy tickets for Mumbai Metro.
Birth of FreeCharge
Freecharge was founded on 15th August 2010 by Kunal Shah and Sandeep Tondon. Earlier than Freecharge, Kunal and Sandeep had been working on Paisaback, which was cash back promotion company for organized retailers, one of whose clients was a store selling mobile phones. One day Kunal found that 95% of invoicing of that mobile store was Recharging. Then they realize that a big amount of traction could be gained by online recharges, especially when it could be make free.
I noticed that 90-95% of the bills were for recharge. My thought was that if this particular product was made free and that was used towards incentivizing a purchase somewhere else, it could result in creating a footfall somewhere else
Said Kunal Shah- Freecharge Founder
He tossed his idea to some retailers with whom he was handling the cash back promotions. Retailers denied him as the margins in mobile recharge business were not too high. This enforces Kunal Shah to pursue his idea on his own and thus Freecharge was born.
Mumbai based FreeCharge is controlled by Accelyst Solutions Pvt. And is backed by U.S. based venture firm Sequio Capital, Belgium‘s Sofina SA and others.
The funding of FreeCharge
Online and mobile commerce platform FreeCharge raised funds to grow through various funding. It first bagged seed funding from Tondon Group of an undisclosed amount to grow the company until it could be able to generate cash from its own business.
In 2011, the company secured Series A funding of INR 200 Million from Sequio Capital. These results in the no bound growth of company; in November 2012, the FreeCharge claimed to be doing online recharge of INR 6 Million on daily basis translating to INR 2.19 billion a year. On the same year in 2011, FreeCharge was named one of the most promising technology startups from India by Pluggd.in.
In September 2014, Freecharge received Series B funding of $33 Million from Sequio Capital, Safina and Ru-net. At that time, it was the biggest fund raised by an Indian Technology Startup. Continuing further, In 2015 FreeCharge raised $80 Million from Hong Kong based fund Tybourne Capital Management and SF based fund Valiant Capital Management and existing. Company utilized these funding on expansion on team size, innovation and added engineered heads to the team.
After FreeCharge’s acquisition by Snapdeal, Snapdeal is tapping Chinese firms to raise money for company, seeking to bulk up its digital payments platform before pitting it against market leader Paytm.
“We are getting a lot of interest from sovereign funds and some Chinese investors” Snapdeal CEO Kunal Bahl told.
The main agenda of Snapdeal must be to make FreeCharge it’s cornerstone of business as it builds comprehensive online ecosystem of goods and services similar to Alibaba, Chinese e commerce giant. If Snapdeal would success in this formula, it can give a big competition to its rivals Amazon and Flipkart.
The building of Freecharge
In the begining 2011, when Sequio Capital, Shailendra J Singh joined the boards of FreeCharge, the marketing strategies of company were booming leaps and bounds. This was the time when they faced one major challenge. Their technology platform was not matching upto the marketing scale. Users were facing a lot of challenge in accessing the website and payment gateway. Kunal and Sandeep desperately searched for the CTO (Chief Technology Offier) to manage at the technology front. After few months of struggle, Deap Ubhi joined the team. Deap Ubhi was well known to Sequio Group and was the ex founder of Burrp.com.
In the end of 2013, unfortunately, Deap has to return to US with his family. Kunal Shah is a great ideator. He has a great mind full of innovative and mindboggling ideas. But he was well aware of the formula of execution. Being a CEO is more about ‘E’ Rather than ‘C’. So he fulfills his shortcomings and brought the ex googler Alok Goel as CEO of FreeCharge. Earlier than FreeCharge Alok was COO of RedBus.com.
It is rare when a founder cum CEO of an Indian startup steps aside and gives the crown to someone else; but this is what Kunal Shah had done for the sake of his company by bringing Alok Goel as CEO. This is the best quality of Kunal Shah, he always put his company as first priority. After this, Kunal continued to have an operational role in the company.
After joining of Alok Goel, Kunal took responsibility to launch many marketing campaign. It went successful and company gained brand recognition. Alok organized FreeCharge in smaller pods around specific product and engineering issues which paced the progress. From this point onwards, company started aggressively hiring and built a team to focus on m-commerce.
In 2014, Freecharge launched its new append suddenly transactions got increased by 50%. This was the time when FreeCharge raised two quick funds, and they launched their first TV campaign in September 2014. Freecharge became no. one shopping app on Google Play.
Snapdeal Takeovers Freecharge
In 2015, The FreeCharge team was on the 7th cloud of confidence on what the company could become. The board members have the plan to grow gross merchandise value almost five years in next one year and FreeCharge has $90Millions in the bank account to get there.
But here comes the largest mergers and acquisitions deal in India; it was the merging of FreeCharge with Snapdeal. It all started when Kunal Bahal, co founder and CEO of Snapdeal contacted, Kunal Shah. The meeting took place in Mumbai along with Rohit Bansal, Co founder and COO of Snapdeal; Alok Goel, CEO of FreeCharge and Sandeep Tandon, Co founder of FreeCharge. They proposed the idea to merge FreeCharge to Snapdeal. Things moved faster and in Feb 2015, the board of FreeCharge agreed to 21 days of exclusivity to put the two companies together. In 22 days, the largest merger and acquisition deal in India was signed and closed.
After the merger, FreeCharge is able to function as an independent platform and all aspects of FreeCharge’s shopping experience are intact.
FreeCharge has more than 20 Million users who use the site to recharge their mobile phone accounts. And pay utility bills. More than 85% of transactions come through mobile phones. Roughly half of its customers have their credit card details stored on the site which makes them attractive as potential customers for Snapdeal.
Business Alligators’ Take
FreeCharge has some interesting lesson that might be beneficial for upcoming entrepreneurs. The upcoming entrepreneur can learn the biggest lesson of Selflessness and hard work from FreeCharge’s founders, as this quality leads a normal startup into a big company.
Kunal Shah emerged as a selfless entrepreneur who gave up everything for the sake of his company. His talent was realized when he was able to let go and create an institute that could helped him in achieving his goals. Many founders face this challenge as they scale their company but the selflessness and lack of emotional insecurity in Kunal helped him to emerge as a wonderful leader. He did not have the title when Alok joined, but he did not care. He just worked insanely to grow the company at exponential rate. According to me, he is not only talented entrepreneur but also a great leader as well as a brilliant visionary of mobile and internet.
The second co founder of FreeCharge, Sandeep Tondon is also a great example to give. He was a person who was never full time, never drew a salary and yet available for the most important projects. It is impossible to find an individual who brings a founder’s DNA without any agenda. He was the true quarterback for the company and guided the team to achieve some major goals.
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