Today's episode explores the IPO of Zaggle, a fintech + SaaS company simplifying payments. Zaggle's evolution includes a multi-wallet card and digitizing expense management. We discuss the rise of expense management companies and the potential risks of Zaggle's IPO.
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Quick takeaways
Zaggle's diversification as a FinTech plus SaaS company has positioned them as a leader in the expense management software market.
Zaggle aims to acquire and retain customers through their IPO proceeds, despite facing risks such as increased borrowings and expenses.
Deep dives
Zagil's Evolution and Diversification
Back in 2011, Zagil introduced prepaid payment instruments (PPIs) in the form of digital wallet-like cards to simplify the rewards and recognition (R&R) market. Later, they partnered with Visa to launch a multi-wallet card for tax-free expenses like meal vouchers and transport. Zagil further expanded its business by creating software to digitize expense management, helping companies track and manage expenses on a single dashboard. This diversification has positioned Zagil as a FinTech plus SaaS company.
Revenue Streams and Customer Base
Zagil earns revenue from corporate clients through issuing reward points and program fees from prepaid card transactions. They also generate revenue from subscriptions for the software they sell and commissions from value-added services like loans and wealth management products. With a loyal customer base of over 2,400 customers, including large corporate accounts and small businesses, Zagil aims to acquire and retain customers through the IPO proceeds. However, the company faces risks such as increased borrowings and expenses, resulting in a net profit margin of just 20 crore rupees on over 550 crores of revenues.