recharge

Continuing its funding spree , Sequoia Capital has put up Rs. 20 Crores (USD 4 Million) in FreeChrage.in. FreeCharge allows users to recharge their mobiles in return for discount coupons & the company has been trying to get more & more people to shift their purchases of such small denominations online. It’s a volume game & only large number of users will help monetize this venture. Incidentally, this is the Second investment for Sequoia in the same company since its seed funding last year. The e-recharge company plans to utilize the funds to “Go Mobile”. But since it has ruled out Interactive Voice Response (IVR) based recharge for the time being, going mobile might suggest a revamp of its website to make it mobile-friendly . The other areas that company chose to focus are adding new products and merchants. It has begun well with having 50 retailers and service providers like McDonald’s, Puma, Shoppers Stop, Jet Airways in its kitty. Recharging of services requires minimum investment if handled well. However, the gross revenue per customer is also very low. Only when a company can manage to entice large number people to buy recharge coupons for the services they use online, can it make some profit. Since its inception in Aug 2010, FreeChrage claims to have an active user base of 1.5 Million & growing. The Business strategy is correctly summarized by Mohanjit Jolly, MD at VC firm Draper Fisher Jurvetson India, “ This is a thin-margin and high-volume game, so you need to do a large value of transactions of say millions of dollars ”. This month itself, Sequoia Capital also invested into a cloud telephony firm called Knowlarity .  Last month Sequoia Capital invested $2 million in online apparel retailer Freecltr . India’s population is increasingly becoming reliant to the Digital world to make all sorts of purchases . It’s retail market is valued at a staggering Rs. 2,000 Crores which is expected to swell to thrice its present size to Rs. 7,000 Crores by 2015. With hoards of e-commerce equipped Indians, the online arms of Retail giants will only witness increased footfalls (of the virtual kind!). With over 90 per cent of India’s GSM Subscribers still using a Pre-Paid Connection the business opportunity exists. It all depends on how such companies along with support of large VC firms manage to monetize it by offering added convenience. Do you use a Pre-Paid connection? How do you recharge it? Looking For A Social Media Agency?? – Contact WATConsult – India’s Leading Social Media Agency Related Posts IT Analytics Company Bags US$ 108Mn: The Biggest Funding Ever? Intel Buys McAfee – Closer Home Quick Heal Gets Funded By Sequoia Snapdeal Acquires Grabbon – Have They Got Funding From Sequoia? eTechies.in Receives 2 Million Infusion From Inventus Mygola Receives Funding From Dave McClure Of 500 Startups And Blumberg Capital