Freecharge, a site that allows consumers to recharge their mobile has secured INR 20 Cr (~4mn) funding from Sequoia Capital.

Freecharge has developed a unique business model (hint: they are not in the business of recharge)and the company has partnerships with more than 50 retailers (Café Coffeeday, McDoanld’s, Domino’s Pizza, Croma etc) and have attracted quite a few clones as well. 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 received a seed investment from Sequoia Capital in 2011, followed by a Series A more recently.

What’s really interesting about Freecharge is the cult status they have developed among college students, given the business model of ‘freebies’. In terms of coupon sold, Kunal Shah (founder & CEO of Freecharge) mentioned the following (on a discussion at Pluggd.in forum: Freecharge copycats):

If you look at FreeCharge carefully there are many coupons which are not available anywhere and we distribute/sell more coupons than all daily deal sites put together in India.

We are aware of atleast 5-10 new sites trying to imitate FreeCharge, and we do have a patent pending status for our business model to protect it

In its current form, the market is wide open for atleast 4-5 coupon players, but the key for couponing sites is to not sell coupons, but to upsell coupons. And Freecharge knows it very well.

Aside, Freecharge was part of Pluggd.in’s most promising startups of 2011 list.
» Follow the discussion: Freecharge copycats for more on Freecharge’ business model/copycats.