FreeCharge was acquired by Snapdeal earlier this year, in one of the biggest transactions in the startup space. Kunal Shah , the co-founder and CEO of the digital payments platform, is also an angel investor.
In a conversation with Sanjay Vijayakumar , he explains why he took the decision to move away from Mumbai and why it has been a trend among startups to move out of Maximum City.
The shift out of Mumbai
Unfortunately, a lot of our business is generated in Bengaluru, and Mumbai has become our smallest office. That happened because of not being able to get good quality product and tech talent . I tried to pull this off for two-and-a-half years in Mumbai but could not scale up the team. Our Bengalaru office has 10 times the staff that we have in Mumbai. Since I was born and brought up in Mumbai, this is unusual for me. Mumbai is known to be the business capital and many things have been created here. But the cost of living is increasing, and life can get pretty hectic.
Cities like Bengalaru have an edge from that perspective. They are able to attract a lot more talent than Mumbai, which is overcrowded and overpriced. It is never an easy decision, but I had to make it. Many companies in our peer group have set up shop in Pune, Bengaluru and other places for the same reason.
Talent migration despite the presence of IIT-B
IIT Bombay has an amazing quality of talent, and a lot of it. I am an angel investor in at least seven to eight IIT Bombay startups. I don’t think they are scaling up in Mumbai either. Bhavish (Agarwal), my friend from Ola, started here and moved to Bengalaru for the same reason. He is from IIT-B.
That will remain a challenge if infrastructure bottlenecks are not cleared. Companies in Mumbai want to attract developers and engineers but talent is not keen on working here because of the pain they have to live with.
What FreeCharge is doing in Mumbai
We are running an incentive programme for Mumbai Metro, where we are giving almost Rs 100 cash back on the first transaction. We are seeing huge results. We are trying to work with the suburban railways to do a similar thing for monthly passes. We are working with Reliance Energy and wish to move 10 per cent of customers online. We are also looking at bringing BEST bus passes online, besides bringing property tax online.
Fortunately, a lot of banks are in Mumbai. With banks, we are trying to work on programmes that can result in a lot of online transactions. Today, an ATM withdrawal costs a bank Rs 16-20.
What I miss about Mumbai
Bengaluru gives me intellectual challenges. Even at a coffee shop, there are startup discussions. But the energy of Mumbai is very different. Bengalaru shuts down by midnight. So, I miss that about Mumbai.
