IT is the largest buyout in the Indian internet landscape, overshadowing the Flipkart-Myntra merger. Earlier this month online shopping site Snapdeal acquired e-commerce website Freecharge in a deal which is reportedly in the range of $400-450 million. This deal marks a momentous landmark in the remarkable journey of the five-year-old Freecharge, which was started in 2010 by co-founders Kunal Shah and Sandeep Tandon.
The bespectacled Shah, 35, who is not averse to enjoying a glass of beer, hails from a business family which was in the pharmaceutical business in south Mumbai. After completing his graduation in philosophy, Shah started to pursue his MBA, only to drop out before completing the course. Wanting to try something other than going down the family business route, he started work as a junior programmer in a start-up. It was here that he met Sandeep Tandon, an investor in the company. However, Shah always had a burning desire to be an entrepreneur and soon branched off on his own with his company, Accelyst, with investment backing from Tandon. Freecharge was launched in August 2010, with Shah and Tandon as co-founders.
Freecharge, the brainchild of Shah, is the platform in which mobile talk time and couponing came together. Freecharge allows users to recharge their prepaid mobile online. The USP of the site is that for every recharge, the customers get discount coupons from top Indian food joints and retailers equivalent to the recharge amount, making the recharge virtually free. The first two retailers to buy into the concept and provide their coupons were McDonald’s and Barista. Soon the likes of Costa Coffee, Cafe Coffee Day, PVR and Domino’s Pizza joined in, and today, the company has well over 50 retailers on board. Shah says he was always a big believer of “free concepts and such ideas occur to me all the time. I find the concept of ‘free’ very intriguing”. Accelyst’s first venture, Paisaback, focussed on different ways to market cash back promotions. Initially, the offerings from Freecharge were viewed by customers with some scepticism, with “too-good-to-be-true” feedback on the dummy page the company started on Facebook to test the users’ reaction, but gradually they bought into the concept. Today, Freecharge ranks among the top ten Indian websites in terms of number of transactions per day. Shah describes the concept as a win-win-win situation.
Towards the end of 2013, Shah stepped aside as CEO of Freecharge to focus primarily on driving the growth of the company and began overseeing the customer experience division. It was in January this year that Shah met Kunal Bahl of Snapdeal, at the latter’s behest, and the seeds of the buyout were laid in that conversation. In a matter of days, the deal was signed and closed. Shah announced the deal on social media. With the Snapdeal buyout, Shah returns to his role at the helm of affairs. Shailendra Singh, managing director of Sequoia Capital, and one of the early investors in Freecharge, describes Shah as a visionary in the mobile and internet space. And, for Shah, the journey has just begin: “It’s business as usual. We have to keep focussing on getting bigger and bigger.”