The Indian startup Freecharge.in has announced this afternoon that its has secured funding worth Rs. 20 crores (US$4 million) from Sequoia Capital – the second time it has been given a cash boost by the same VC firm.
Freecharge allows users in major cities in India to get free coupons – either by mail, or in the form of e-coupons – when they pay via the website to top-up their mobile, data, or TV credit accounts. It’s similar to the group-buying/daily deals model – as pioneered by the likes of Groupon (NASDAQ:GRPN) and Livingsocial – except that the goodies actually are free. The service claims to have grown to 1.5 million users since its inception just 18 months ago, and to be one of India’s highest transacted e-commerce sites.
The company says that the new injection of funds from Sequoia will be used to add new products, add merchants as partners, and to advertise the service to consumers.
Sequioa Capital’s managing director, Shailendra Singh, said in the accompanying press release:
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 [direct to home] services, to generate demand for large merchants. […] Some of the e-commerce merchants that offer coupons on Freecharge have seen their sales grow 50 to 100 percent due to Freecharge alone.
Merchants currently participating in the coupon deals on Freecharge include McDonald’s, Puma, and Best Buy.