Simplifying Business Spends
Zaggle is a home-grown SaaS-fintech platform that helps businesses digitise spending across employee reimbursements, vendor payments, channel partner rewards and incentives, along with a host of expanding use cases. Founded in 2011, the company has steadily evolved from a corporate gifting player into a full-scale enterprise spend management platform. Its key products such as Save, Propel and Zoyer allow corporates to automate and track spends, while newer product launches are adding analytics and international payment capabilities.
With a robust customer acquisition model, Zaggle has built strong partnerships with 19 banks and all major card networks. The company has issued 50mn+ prepaid cards for over 3,550 corporates with around 3.3mn active users, while operating an asset-light model with high customer stickiness. Monetisation includes SaaS subscription fees, interchange income and merchant commissions. With rising cross-sell via ecosystem play, growing adoption of digital spend tools and a strong portfolio of enterprise clients, Zaggle is perfectly positioned to benefit from the sustained formalisation of business spends in India.
We initiate coverage on Zaggle with a BUY rating and a Sep’26 TP of INR 520 (~44% upside), valuing the company at 30x Sep’27E EPS, slightly conservative compared to other B2B internet peers considering the recent margin dip and the rise in working capital requirement for Propel. We expect the company to sustain growth trends while improving profitability sharply.
Key risks include 1) slower adoption of newer products, 2) large banks launching their own prepaid or corporate cards, increasing disintermediation risks and 3) investments in newer adjacencies, acquisitions and international expansion, which might lead to margin volatility and slower profitability expansion.
Leading B2B SaaS-fintech platform driving digitisation of enterprise spends: Zaggle is a full stack B2B SaaS-fintech platform helping enterprises digitise and manage spending across employee benefits, vendor payments, rewards and fleet expenses etc. Its proprietary tech stack includes Save, Zoyer, Propel and the new ZatiX analytics platform that offers end-to-end automation through API-driven design. The company has issued 50mn+ prepaid cards and serves more than 3,550 corporates with an active base of 3.3mn+ users across industry verticals. Partnerships with 19 banks and all major card networks enable wider reach and an asset-light business model, while newer offerings such as fleet management and international payments (ZIP) are opening up new use-cases within the existing client base.
Robust network effects with strategic acquisitions creating a strong moat: Zaggle’s business benefits from strong network effects as clients once onboarded and integrated see higher friction for platform switching, resulting in low customer churn (< 1.5%). Furthermore, cross-sell enables Zaggle to also distribute other products to the same clients. The company has also enhanced its capabilities through strategic acquisitions such as Mobileware, Effiasoft, TaxSpanner, GreenEdge, etc. with an acquisition pipeline to sustain the value enhancement play. This creates a strong moat with minimal customer acquisition cost, positioning Zaggle as a full-stack “Spend-as-a Service” platform rather than just a card issuer. Initiate with BUY; strong compounding visibility and long runway for growth: We expect c.34% / 52% revenue / PAT CAGR over FY25-27E, driven by steady SaaS adoption, operating leverage and incremental growth from new products and adjacencies. Profitability is expected to improve as the mix shifts towards subscription income and incentive costs continue to be normalised. With improving RoE / RoCE (14% / 12% by FY27E) and a proven asset-light model, Zaggle offers a long growth runway in an underpenetrated market. We are assigning a conservative 30x Sep’27 P/E multiple to initiate with a BUY rating and a Sep’26 TP of INR 520.
