Kunal Shah is the CEO and Co-Founder of FreeCharge.in, which was established in August 2010 with the objective to carter to the prepaid customers. Kunal amassed huge experience working with TIS International Inc as Business Head. He founded the first company in 2009 called “PaisaBack” and scaled it to 1200 employees. FreeCharge is his second venture that offers online recharge facility to customers. In an exclusive interview with India Digital Review, Kunal Shah speaks about his plans and ideas about making FreeCharge.in the number one transaction site in India.

What was objective and idea behind launching FreeCharge?

I have been a big believer in free. New ideas occur to me all the time. Accelyst’s earlier venture, Paisaback looks at innovative ways of cashback promotions. People like free things, but at the same time, free has no value if there is no effort required on the part of the customer. While I was looking at ideas to club promotions with the most penetrated market that is mobile telephony, the idea of FreeCharge occurred to me. Further brainstorming with my team led to the refinement of this concept.

You started you career in the BPO industry. What was the motivation behind becoming an online entrepreneur in India?

I started my career with a failed ecommerce start-up in the year 1999-2000. BPO happened post the burst of that bubble. But the bug of online business stayed and thought this was the perfect time to be an online entrepreneur.

FreeCharge.in had raised Rs 20 crore from Sequoia Capital in January 2012. How have you utilised your funds? Any more plans of a raise?

We’ve raised funding for working on multiple things – getting our product up to a certain level, and to expand to multiple platforms, create mobile apps, and try and bring on board more prepaid services. We’re looking to add more couponing partners, and different types of couponing, and try to create a product which can scale to handle tons of transactions. We’re looking to increasing our base, and get more users to come on board.

We may look at raising sometime next year.

You had recently inducted Burrp-founder DeapUbhi in the management team of FreeCharge. Your idea behind that.

It’s good to have great team members in your team to succeed. Deap comes with a lot of great qualities and is a key player for our way forward.

Speaking about online recharge in India, what percentage of Indian mobile users presently recharge their mobiles on internet? What is the daily number of transactions you record on FreeCharge?

98% of the Indian mobile telephony market is prepaid. As per data, about 15-20 million people recharge their phones every day, mostly through offline channels. We sense huge opportunity here as internet penetration in increasing and about 5% of people use internet banking for transactional purposes.

FreeCharge.in is one of the five largest online portals through which roughly 40,000 transactions take place a day.

Also, when most service providers have prepaid recharge services available on the own website, why would one come to you?

Well, we innovated and married coupons to recharge and people came to us. Post that all recharge sites became coupon sites. We will out-innovate and constantly differentiate.

What is the total subscriber-base of FreeCharge and out of these, how many are active users?

We have over 2.75 million users and over 70% of them actively transact with us.

Which geographies have led the growth of this portal since launch?

Top 20 cities contribute to 80% of our business.

What is your revenue model? What are your revenue expectations this fiscal?

Our revenue model is three-fold. We make margins from operators to sell their recharge, customers to avail them coupons and merchants to list their coupons.

How have your scheme of offering free coupons helped you to attract customers to FreeCharge.in?

FREE is universal catalyst that works.

Which service is most favoured by users – coupons, mobile recharges or DTH recharges?

They are not isolated in our business model. All of them are integrated and work seamlessly.

What are your thoughts on competition especially when there are number of ‘me toos’ in this segment?

We have over 10 clones trying to imitate us and this is a good validation of our business model. Competition will need to innovate at the same pace as us.

Do you plan to include other service categories on the website as well?

Not at this time. But maybe next year.

What are your thoughts on service ecommerce Vs product ecommerce?

Product ecommerce is a tough business and I feel it’s a solution trying to find a problem. Except for smaller cities buying online due to lack of availability I don’t really see a need of lot of urban customers buying online. The price difference for items online barring books is not significant for people to move their transactions online. India is a nation of assisted buying, self-service buying will take some time.

The future of online recharge business in India and where do you see FreeCharge.in fairing in the market?

Online recharge business is already the largest when it comes to transactions per day, and only 2% of people recharge online. There is a large opportunity ahead. FreeCharge.in aspires and will be the number one transaction site in India.