Immigrant Business Statistics | Name: Anurag Jain | Country of Origin: India | Immigrated to US: 1996 | Business name: Prepay Nation | Location: Berwyn, PA | Launched: 2012. Annual Revenue: $110 Million
Two Indian immigrants launch one of the fastest growing businesses in America — one that is revolutionizing cross border payments around the world.
Anurag Jain took a temporary job outside of his field in order to be close to his wife who was doing research in the United States. It was just a means to an end, but it gave him an idea which has become a catalyst for a named Prepay Nation that’s changing the life of both immigrant workers around the world as well as their families back home. Not only that, this $110 million dollar business is revolutionizing global payment systems as well.
Here is his story.
A Means to an End
New Delhi native Anurag Jain was newly married and didn’t want to be separated from his wife, so he followed her to the United States when she was offered a post-doctoral fellowship. Although a trained telecom engineer, he took a job with an Indian company that ran a call center plus a portal called GiftstoIndia.com a gift giving website for Indian software developers who had come to America during the Y2K crisis.
Starting His Own Business
While working for GiftstoIndia.com Jain discovered a business opportunity in exploiting the excess airtime of mobile telephone providers, and he left his employer to start his own business called MagicPins. His business sold retailers scratch-off cards that contained a PIN number allowing the user to add calling time to their phones. However, Jain and his new partner Ajay Vikas Goyal, a friend from Jain’s university days, approached the providers with a better idea, distributing the PIN numbers digitally through the company server rather than through scratch-off cards. This idea was to become the key to starting a brand new company, far bigger than MagicPins.
Prepay Nation: A Revolutionary Concept
The new company, Prepay Nation, borrowed a page from the playbook of Jain’s former employer, by allowing immigrant workers to “gift” their loved ones back home, but instead of flowers or chocolates like GiftstoIndia offered, Prepay Nation let customers send cell phone minutes, at no additional cost to themselves or the recipients.
“If you want to send ten dollars of air time to a friend in Mexico, you can do that with Prepay Nation by crediting the mobile phone of the person in Mexico with ten dollars worth of pesos in air time.”
Prepay Nation is primarily a reseller for mobile operators, selling their excess airtime. In return, Prepay Nation receives a commission from the mobile operator, and that’s the source of their revenue. Launched in 2010, the Berwyn Pennsylvania based company has grown quickly, from $2 million in revenue the first year to $110 million in 2013. It has also been recognized in the business media as one of the country’s fastest growing companies.
Here’s how Prepay Nation works, according to Jain: “If you want to send ten dollars of air time to a friend in Mexico, you can do that with Prepay Nation by crediting the mobile phone of the person in Mexico with ten dollars worth of pesos in air time.” Jain also points out that this is a digital transaction, and the airtime cannot be exchanged for cash by the recipient.
Funding the Company
Prepay Nation has not required outside funding thus far. Jain and Goyal put in some initial upfront money from their savings, and have invested a lot of sweat equity into the concept. What made this approach possible was that Goyal is a software engineer, and he built their platform. “He’s an awesome technologist,” says Jain of his partner. “So we didn’t have a lot of technology expenses in the beginning.”
Customer Demographics
Although they come from developing nations all around the world, including India, Tibet, the Philippines, and Haiti, Prepay Nation’s customers tend to share certain characteristics: they are family oriented, credit-challenged “cash” customers, and, of course, they are immigrants, who have traditionally supported their families in their home countries by sending them cash.
“Now we’re looking at ways where an immigrant in the U.S. can pay for groceries, pharmaceuticals or gasoline products for their families in back home.”
Competitive Advantages
Prepay Nation has competitors, both in America and overseas. A few of these companies are owned by multi-national corporations, and others funded by venture capital firms, but Jain feels that, at least for the time being, the fact that his company is still private gives certain advantages. “Our cost of doing business is low, and we have no outside interference,” he says, adding, “This has given us nimbleness and flexibility.”
Growing the Business
One of the reasons Prepay Nation has been so successful in such a short time is that they’re helping to solve an all too common problem: immigrants have no control over how money is spent that they send back home to their families, and money for cell phone use is just the tip of the iceberg. This started Jain and his partner thinking how they could expand their business. “Now we’re looking at ways where an immigrant in the U.S. can pay for groceries, pharmaceuticals or gasoline products,” says Jain.
The retailers they’ve contacted in their target markets have been very enthusiastic, according to Jain. “They’re more than happy to share [from their profit margins] if they’re getting more customers and moving more volume of product. In essence, we are providing marketing for them and this is something that they budget for already. We can give them some exclusivity within their market.”
The Future
To fully realize Prepay Nations’ potential, Jain and Goyal will have to develop distribution channels around the world, and offer more products. They’re already making big strides with 150,000 storefronts offering their services around the world, but bringing on vendors of commodities such as gasoline and groceries in those same markets will inevitably require additional and timely infusions of capital. However, given Prepay Nation’s strong management and meteoric growth, capital should not be hard to find.
