FreeCharge.in has raised Rs 20 crore from Sequoia Capital in Series A round of funding. The funds will be used to add new products, add merchants who can use FreeCharge to target consumers, and to advertise the service to consumers. The company had earlier received a seed investment from Sequoia Capital in 2011.

FreeCharge.in allows users to recharge their mobiles in return for discount coupons, pushing more people into shopping online. The portal launched in August 2010 by Mumbai-based Accelyst Solutions and has tied up with at least 50 retailers and service providers, including McDonald's, Puma, Shoppers Stop and Jet Airways. The site claims to have a user base of about 1.5 million.

“At our end, we are excited about the intelligence we are building around the consumer’s preferences and the ability to target better offers to them, and driving hundreds of thousands of transactions to our merchant partners every month.” said Kunal Shah, Co-Founder and CEO, Accelyst Solutions.

Shailendra Singh, Managing Director, Sequoia Capital said, “FreeCharge has created a new online model, enabled by couponing. We were attracted to FreeCharge because it isn’t another daily deals site, but one that leverages a very localized phenomenon of pre-paid mobile and DTH services, to generate demand for large merchants. FreeCharge allows merchants to publicize offers, that consumers pay a small fee for, thereby establishing very strong intent. Some of the ecommerce merchants that offer coupons on Freecharge have seen their sales grow 50-100 per cent due to FreeCharge alone.”

This is Sequoia’s second investment announced in January. Last week, it had announced a Rs 35 crore investment in Gurgaon based cloud telephony startup Knowlarity. Sequoia Capital has invested in several ecommerce companies in India including $4Mn in apparel and accessories ecommerce startup FreeCultr. It has also invested in FashionAndYou.com and HealthKart.com.