A deal believed to be around Rs. 2,800 crore, Snapdeal’s acquisition of the online recharge platform Freecharge has made them the biggest startup M&A’s (Mergers and Acquisition). Freecharge from the very beginning had an interesting tale to share but was it always their exit strategy to get acquired by a bigger giant?
The Inception
When Freecharge initially commenced their business, Kunal Shah had read a guest piece from Naman Sarawagi and had liked his insight on the mobile recharge business. He immediately got in touch with him and hired him as his first employee. The name Freecharge was coined after that. Naman was handling feature and development aspect of the business. At the very inception, they were not very serious about the technology, but somehow managed to build on it.
Say Hello to Social Media
During the time when Freecharge took on to social media marketing, their focus was to divert users on to the site. Just like any other business would want that. The approach was unconventional. The team created a mock profile of a good looking girl on Facebook, complete with pictures et all. They would share content, which was giving out an impression of an actual girl sharing girly content. Within no time, the girl became popular and soon started sharing links and offers from Freecharge. Kunal Shah understood human behavior well and hence this social media marketing trick.
Appointment of Deap Ubhi
Once Freecharge had the momentum going on their side, they had the masses interested in their product. Now was the time to dress up their offering with a fine UX. For this, they hired Deap Ubhi, ex-Burrp Co-Founder to lead technology and product. This led to a change in the UX strategy and emergence of Freecharge as a serious player in the market.
Kunal brings Alok Goel as CEO
One of the best things about Kunal Shah was that he knew his limitations. He knew his strength lies in ideating, but he needed someone who can handle the execution. He brought in Alok Goel as the CEO and he handled execution of Kunal’s ideas beautifully. Alok’s mobile and Google work experience helped them scale Freecharge to new heights. Alok was global Product Management lead for Google Display Network and was responsible for the re-launch of Google’s flagship display ad product – AdSense. This addition was just what the doctor ordered for Freecharge’s success.
The Masterstroke – The Exit
Freecharge could not have made an exit at a better time. Their closest competitors Paytm and Mobikwik had further scaled up to offering lot more than just mobile recharges. Paytm which recently got funded by Alibaba had emerged as the market leader. Mobikwik on the other hand was having fantastic tie-ups with Jabong, Bookmyshow, CCD and many more. Freecharge had nothing more to offer to the masses than mere mobile recharge. With not much room for innovation, an exit was on the cards.
But, now being acquired by Snapdeal, Freecharge has new ammunition in its armory. Now they together can aim at targeting a bigger battlefield and aiming at product growth for both brands.
The lesson startups can learn from this is that Kunal Shah is a smart businessman who knew innovation was vital for him. Not only that, but he was well aware of his strengths and weaknesses and acted on it accordingly. Never did he let his ego get in the way of the progress of his company.
If you too have entrepreneurial dreams or wish to have a venture like the ones listed above, you need to have faith in your Chatur Idea. You will always wonder who will fund this idea and from where will you find investors. In that case, you can participate in the #BeAChatur Contest and not only be mentored but also stand a chance to win a whopping Rs. 10 Lac funding for your dream startup idea.
