Agree and with there recent acquisitions like effiasoft,rio money,dice,green edge ,tax spanner,mobileware etc there are creating a complete ecosystem
And from prepaid cards slowly entering in retail cards as well.
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They are building brand Zaggle and connecting premium customers to it. Meanwhile they are building different product portfolio which are interlinked. If this is successful , they will gain hugely from network effect as well as cross-sellling. Might become Indiaās beautiful Product company .
Management is very aggressive whether it be acquisition , Selling , tie-ups or product building.
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The problem Iāve with Zaggle is consistently bad reviews online.
If you look at their Hyderabad and Mumbai office reviews on Google, it is majority 1-star reviews. The 5-star reviews are by folks who only have 1 review overall, making it look really suspicious.
Additionally, majority bad reviews on Glassdoor and again paid 5-star reviews typically all on the same day to counter the original bad reviews.
I just sold a good chunk of my stake in Zaggle.
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Office reviews I never trust. Users mostly go to rate when things are not running smoothly. No one will rate a bank branch when everything is running well. Issues will rise up and if you check reviews for many banks, you will see 2-3 star reviews.
Glassdoor had decent review and anything above 3 is good for me as once again, upset employees have more reason to complain. Tbh higher than most companies i have seen atleast
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Employee complaints are common for product companies in their growth phase bro. Iāve worked in several so have first hand experience. Long hours and burnouts are common.
This is not a service company where you can cruise for most of the year, with only occassional bursts of work.
So I wouldnāt base my investment decision on the reviews of disgruntled employees.
I will panick if their customers were leaving them because itās a bad product, but the customer churn rate is <1.5%, which says the product useful.
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In these type of companies, I usually look for average or low feedback, just having real reviews is reassuring that the company has legit operations.
Disclosure: Sold, tracking
I get what you guys are saying, but paying someone to mask those reviews just doesnāt seem ethical to me.
Look at the Glassdoor reviews from these dates
- 4 5-star reviews on 23 Nov 2020 - all seem fake
- 3 5-star reviews on 25 Aug 2020 (fake)
- 2 5-star reviews on 3 Sep 2020 (fake)
- 3 5-star reviews on 3 Dec 2019 (fake)
Similarly, their genuine Mumbai and Hyderabad office Google reviews are all 1-star.
And the number of acquisitions these guys are doing, Iām not sure how practically you can integrate all of them is a good product with the likes of Ramp and Brex that they keep talking about competing.
Iād love to speak to anyone here who is an actual Zaggle customer or used its products
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Couple of things, in my glassdoor account I donāt see some of the comments youāre referring to, but for the ones I did, them being fake is speculative. Even if they are, I actually donāt see the point in cherry picking a few from 5 years ago and making investing decisions based on them.
If I were a business owner Iād fake a few too to attract employees (yeah itās not morally correct, but you do what you need to survive).
There are about 200 reviews and a majority of them are negative, which, like @sjerry4u said, gives enough confidence that itās not all fake.
Corporate culture in India is shit, thatās a given, so if weāre to invest in companies based on that I donāt think weāll have many left to invest in.
But, each to his own, Iām holding on to my investments unless they stop growing or customers start running away from them anyway. Cheers :)
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I asked around my friend circle in diverse set of companies, I couldnāt find a single person who came across Zaggle.
Has anyone used or seen it in your companies?
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Few mentions of Zaggle on Reddit of all places but nothing more
Did some google search. Sharing some relevant links so that others can benefit (results from top 4 pages in google search):
DBS Bank (I guess this is only for India)
Zaggle EMS
Generally looks quite good in terms of product review in b2b context.
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+1.
Nowhere have I seen Zaggle used in Bangalore or Chennai. However, people here write as if it is everywhere and that the world would crumble without it.
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I donāt think they are that big. Am thinking loud here with some back of envelope calculations. Trying to make sense by a crude comparison with Zoho.
They are about 1/10th the size of Zoho based on the rough revenue projections.
But, given Zohoās margin at 30% plus, and Zaggleās margin at 6-9%, I would put them even smaller, at 1/25th of Zoho.
So, the chance of coming across Zaggle is 1/25th of that of Zoho. Also, Zoho does extensive marketing and is in the news all over recently.
To me, the main negative is their low margin biz.
Disc: Invested
On What basis you are comparing zoho with zaggle both are completely different zoho has multiple product offerings and they also had zoho expense we donāt know how much it contributes to zoho,I suggest try to understand the zaggle business properly many people instead of understanding the business they just commenting it is bad because of user reviews etc
And zaggle is well diversified spend & expense management platform which offers different products like zaggle save,propel,zoyer etc and they are the largest prepaid card issuer if iam not wrong and zoho expense we donāt even know there business model because it is unlisted company.
And daily big companies collaborating with zaggle for various products and theyāre churn rate less than 1.5 %
And to gain market share zaggle needs to be competitive and need to give cashback consistently and they need lot of advertising because thatās how the business work.And due to this there roce,roe also look bad but that is to gain market share.
And zaggle is the number 1 in the expense management and happay is number 2 I guess in India and globally we have competition from sap concur,fleetcore,brex,ramp etc there are in usa etc regions not in India
iam not sure if you compare there size you know how zaggle gained market share in india and you will appreciate how zaggle was profitable being working in this competitive space.
Except sap concur,fleetcore and expensify all other companies make losses these data is little old and if you see there market cap valuation and zaggle you find the real value in zaggle.
And many of the global companies get good valuations to this companies who work in this space globally,and who are not profitable there valuations is very good you can check there market cap as valuations just for reference and zaggle from start being profitable,it is not proper comparison iam just giving idea.
I suggest going forward please give some Evidence why it is bad instead of saying user reviews are bad,i didnāt heard in my region etc silly reasons because it is not real issue and if any real issue with evidence you found please let us know then.
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I had Zaggle Prepaid card as a Food card in my last IT services company(not Indian ones), used it on Swiggy to order foods, had their App too on my phone to check balance just like Sodexho, earlier had HDFC food card too
Expense management system are controlled by Procurement folks in companies which comes generally under Admin/Finance department
In general SAP/Foreign Product OEM licenses are costlier, so Indian companies with similar features can make inroad with cheaper pricing which seems to be true here
Disc : Had investment for a brief period but exited due to too many acquistions and margin improvement needed
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Zaggleās rapid-fire M&A spree sets up a pivotal yearāwill it create Indiaās dominant spend management ecosystem, or bust at the bubble? Dive into āPocket Queens at the WSOP Bubbleā for a poker-inspired deep-dive on Zaggleās next move.
Read: https://pokerinvesting.substack.com/p/zaggle-prepaid-pocket-queens-at-the
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Zaggleās game is getting clearer. Owning GreenEdge gives them a foot in the premium rewards space ā golf, luxury, well-being, nutrition etc.
Then youāve got Times Group coming in with ā¹40cr and massive media muscle. Thatās not just money, thatās free branding at scale. So revenues go up, marketing burn goes down ā simple accounting, right?
Margins get a lift. And with retail cards closing the loop, theyāre quietly building a high-margin, self-feeding ecosystem.
I can see the bigger picture here:
Zaggle isnāt just a rewards platform anymore. Theyāre quietly owning the pipes. GreenEdge gives them premium experiences, Times Group brings ā¹40cr + media muscle, Mobileware gives them the UPI switch, Dice handles spend orchestration, TPAP opens forex rails. From platform to full-stack ā theyāre capturing the entire value chain.
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These kind of companies are essentially high risk investments. If they get 7 out of 10 things right, they can blaze a trail. Else, fall flat.
They are doing press releases regularly with name of customers acquired. So there is traction. It cannot be false propaganda.
Traditional Indian companies are not good pay masters for software which doesnt address the topline. New age companies are different. They are willing to pay. The low margin is indicative of this issue, where to make their money, they need to earn from payments which is essentially a low margin business.
However, as generational changes happen and talent gets expensive, the acceptability will increase. The risk of being ahead of time is immense.
The key to success will be to keep reducing the reliance on making money on transactions and to earn money on software. This only can address margin issue. But will take time. Growth and margins are often a trade off.
The bet on many such companies will be essentially a bet on surviving thru the rapid growth phase, having stickiness with customers and then having a strategy on improving margins when things mature a bit.
A tall order no doubt.
No Reco. Invested.
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Results Q2FY26 to be declared today with concall scheduled at 5:00pm if I am not wrong.
Few metrics to keep in track to assess the company future:
ā¢ Topline Organinc Growth ā„ 32-35% (Historically they have higher H2 Growth. Can spun a surprise of higher topline with Taxspanerās income coming in. Guided a core top line growth of 40-45% for FY26)
ā¢ OPM% of 10% +
ā¢ Higher SaaS & Zoyer revenue growth.
ā¢ Improving CFO & decreasing or stable Trade receivables. (Though since they are in aggressive growth phase trade receivables seems unlikely to go down as it is inherent to business as they need to load their prepaid card in advance, & because generally employees upload their bills in a cycle of 45-60 days. Therefore increased Working capital cycle.)
ā¢ Growth in increase of corporates. Attrition rate below 2% (Currently sitting at 3455 corporates(FY25), a growth of ~14.5% over 3016 from FY24)
ā¢ Cross selling increase if data given company aiming at 40-45% by FY28-29 (Latest 20% in sept 2024 from 16% during IPO stage)
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Attended the concall today & even asked management few questions regarding Cross-sell numbers as well as Acquisitions.
Result Highlight:
YoY (Q2 FY26 Vs. Q2 FY25)
Revenue: 430.38 Vs. ā¹ 302.56 Cr (+42.2%)
PBT: 44.46 Vs. ā¹ 25.79 Cr (+72.4%)
PAT: 33.24 Vs. ā¹ 18.56 Cr (+79.1%)
EPS: 2.48 Vs. ā¹ 1.51 (+64.2%)
QoQ (Q2 FY26 Vs. Q1 FY26)
Revenue: 430.38 Vs. ā¹ 331.49 Cr (+29.8%)
PBT: 44.46 Vs. ā¹ 34.56 Cr (+28.6%)
PAT: 33.24 Vs. ā¹ 25.88 Cr (+28.4%)
EPS: 2.48 Vs. ā¹ 1.93 (+28.5%)
Here are some pointers from CONCALL, up & above the Results.
- Current cross sell rate at 21% on 3674 corporates. (Couldnāt provide a satisfactory answer to their targeted numbers of 40%+ Fy28)
- Only given financial highlights from Mobileware (Q2FY26:= 24 Cr revenue,7 Cr Ebitda & 4 Cr PAT)Nothing specific given about Tax Spanner.
- Green edge is revenue accretive & margin accretive but refrained from sharing specific number or time line.
- No credit risk or delinquency risk for Rio Money, their B2C credit card segment. What I understood is they gonna use this platform to help build cards for bank to serve their retail customers. So all the credit risk would fall upon the Bank.
- Their B2C segment to contribute 500 Cr in 5 years
- DICE platform would contribute 21-22 Cr by FY26
- OCF part. Would breakeven by Q4FY26 & turn positive from Next Financial Year.
- Their Intangible assets under development are on A.I side. They would still be under development for 1 more year, pumping few more money into it before its streamlined. Post streamlining, its amortisation would start hitting PānāL.
- post acquisitions, they are still left with 430-440 Cr money in bank deposits.
- Avoided on disclosing FLEET management revenue citing its extremely small business as of now. Would give ball park number on it post 2 Quarter.
- No Outside India revenue contribution as of now. Opened New office in GIFT city for MENA region business.
These are the gist of what I remembered. Not in Sequential order of call timeline.
Free to correct me & add to this.
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