FreeCharge's Kunal Shah raises $30 mn for upcoming startup: Report

Kunal Shah, co-founder of digital payments platform FreeCharge, has raised $30 million (Rs 201 crore) for his yet-to-launch startup from a group of investors led by venture capital firm Sequoia Capital, a media report said.

Besides Sequoia, foreign investors are also part of the funding round, financial daily Mint reported, citing two people in the know, who requested anonymity.

According to a report in April by The Times of India, the other investors involved in the deal include Ru-Net, a Russian financial-technology focused fund and an investor in FreeCharge, Ribbit Capital, and several others.

Sequoia was an investor in FreeCharge.

Shah is also going to launch an incubator focused on startups in the consumer space, the Mint report added.

Mobile text messages sent to Shah did not elicit an immediate response at the time of publishing this report.

In April 2017, VCCircle had reported that Shah and co-founder Sandeep Tandon floated a venture fund named Whiteboard Capital Advisors LLP and made its first known investment. It could not be independently confirmed but the venture is believed to represent the principal investments of the duo. However, Shah stepped down as a partner from the venture fund. Whiteboard made its maiden investment by leading a Rs 2-crore seed round in ed-tech startup Genius Learning Labs Pvt. Ltd.

Shah, an MBA dropout from NMIMS, set up FreeCharge along with Tandon in August 2010. The company went on to raise over $120 million as it grew to be a significant player in the fast-growing digital payment space in India. In April 2015, FreeCharge was acquired by online marketplace Snapdeal. After the acquisition, FreeCharge continued to be run as an independent entity under Shah's leadership. Although the deal value was not publicly disclosed, multiple media reports citing unnamed persons had pegged it at $300-400 million. Shah, on his LinkedIn profile, has mentioned the acquisition value to be about $450 million. He left the company in October 2016.

The duo had received a small lot of shares of Snapdeal as part of the stock swap involved in the FreeCharge deal. It is not known publicly if the founders also received some cash. They held 1,030 preference shares each as on 31 March 2016, according to Snapdeal’s balance sheet filed with the Registrar of Companies.

FreeCharge was one of India's top recharge platforms allowing users to pay their mobile, DTH and other utility bills across most major operators. However, the company has since lost significant market share to Paytm, Flipkart’s PhonePe and a host of other digital wallets.

Last July, Snapdeal sold the digital payments company to Axis Bank for about Rs 385 crore ($60 million).

Shah has served as an advisor at Sequoia Capital in 2017. Previously, he was chairman of the Internet and Mobile Association of India (IAMAI) from January 2016 to May 2017. He currently serves as an advisor to US-based investment crowdfunding platform AngelList.

Shah is also an active angel investor, having backed several early-stage companies across segments. His investments include do-it-yourself e-commerce platform Zepo, co-working space provider Innov8, pre-owned cars platform Spinny, and online learning platform Unacademy, among others.

In 2016, he was ranked the third most active angel investor in India, with a total of 19 investments, according to VCCEdge, the data research platform of VCCircle.