FinTech company Zaggle is leading from the front with constant innovation with a laser focus on customer requirement. Zaggle uses Deep Tech and Artificial Intelligence to provide platform solutions to businesses for expense management & employee reimbursements as well as for rewards & recognition. Zaggle is working with a number of banks, other Fintech companies and networks to build a state-of-the-art open banking platform for small & medium-size businesses (SMBs). In an interaction with N V Vijayakumar, Zaggle founder and Chairman Raj N is sharing his insights on the company’s efforts to unlock value and drive business growth for B2B and B2C customers by getting into anything related to HR, finance, marketing and sales.
Can you share an overview of Zaggle’s great journey and how you become a full-fledged B2B platform?
Zaggle started as a company based on 4 tenets. Those four tenets were:
- Any business that we want to start must be scalable in nature.
- The business should be global in nature.
- It should be built on tech and
- The management should have some experience about the business.
Over the years, we have learned that these are the most crucial parameters to help build our business. Our business started in 2011 with the core theme of Digitization, which became extremely common with Covid.
We realised that consumers are highly dependent on physical transactions for their needs and we focused on digitizing this entire process. Keeping this in mind, we began our journey and started with digitizing vouchers. We realized that every retailer has a separate voucher.
Hence, we decided to launch one single digital card which can be easily accepted in any company. Moreover, they do not have to change their infrastructure to accept it. We decided to go ahead in this direction and gauge the effectiveness of it in the years to come.
We started offering our first product to the corporate sector, known as BOMB – Box Office Movie Bonanza. The idea was to release the stress of IT employees who go through a lot of mental pressure in their work. The Corporate sector started deploying these cards to their employees, which enabled them to watch films at different movie theatres or dine out at food joints and entertainment centers.
With the inception of BOMB, we continued launching successive cards which were physical in nature but could be used digitally. Witnessing the success of this, we broadened our horizons and shifted to employee rewards and incentive programs. Slowly, we shifted to incentives for distributors, retailers and CFA agents and that is exactly where we received very high traction. Our GTV grew from Rs 4 crores in 2012 to Rs. 12,000 crores in 2021. This has been our journey in terms of growth.
We then shifted to the corporate world and realized that most of the corporate processes were broken. We spoke to many marketing teams and they stated although they had a good incentive budget for their distributors, but they (distributors) are unable to receive their incentives on time. One of the main reasons for this was incentives were not given in the form of cash but as a boost.
Depending on the budget, every company would have these kinds of boosts, such as cars, gold coins, etc. However, more often than not there were issues of gold coins been pilfered or distributors not receiving their incentives. Looking at these issues, we came up with a platform on which a corporate could simply upload an excel sheet having the names of all the distributors and the gifts would be generated and sent to the distributors automatically.
Earlier this entire process was physical in nature however now it has transitioned to a digital process. The entire process does not take more than ten seconds and all the distributors receive the virtual cards instantly within the same day which can then be used by them across different e-commerce and other relevant platforms. In the process, we realized that these corporate entities also incur expenses of their employees, which includes corporate parties, national and international travel spends, etc.
However, we saw that this entire process of managing the employee expenses was broken and the underlying reason for this was nobody keeps the bills. Employees being human are not able to remember all the expenses that they have incurred. Hence, eventually, they lose a lot of money and crib with the HR and CFO for reimbursement.
We looked at this entire system and asked ourselves if there is something that we can do about it. Hence, we developed a system known as the Expense Management System, where we integrated software in VISA and RuPay cards and directly connected it to the expense management platform called Zaggle SAVE.
The system is such that an employer just needs to integrate the accounting system to it and the employees can send all their expense bills using this application directly to the management system. The employee just needs to take a picture of the bill and upload it on the system instantly. Hence, everything is automated. There are also a few enticing features of this card. For instance, employees booking tickets through Yatra can receive cash back in their account, for every Uber ride there is Rs. 30 cash back. There are plenty of such offers which are entirely automated. We have been successful in enrolling many large corporate entities into the expense management system transcending geographical boundaries.
Our system speaks to almost every kind of accounting system. We are also able to undergo currency conversions and split the bill using our software. This is our entire story of building a network agnostic system and have come a long way while building ourselves into a fully-fledged B2B SaaS Platform. Whether a company wants a reward system or an expense management system for its employees the software can be easily downloaded digitally and does not require physical installations and is completely data secured from our best cyber inscription.
What was the reason behind the transformation from B2C to B2B and what advantages laid in the B2B space? Can you slightly elaborate on that?
The pace at which India evolved within the period of 2010 to 2011 was insane. E-commerce companies were spending money in crores to acquire a few sets of customers. The LTV of a customer was extremely low while the customer acquisition cost was exorbitantly high. Hence, it did not make any sense to us to compete with these platforms heavily funded by the large players.
Hence, we did not want to compete with them as it seemed to be a losing game to us. Also, B2B was our natural expertise and we were even able to offer multiple services to the same corporates which started off as employee engagement and continued to expand our services to channel incentives and expense management respectively.
We are growing exponentially and are also stepping into Banking services with them. The corporate has remained the same but we have been able to offer them a varied range of services which has enabled us to have higher control over them.
So you mentioned a few of the services that you have been delivering, are the Banking services already integrated?
Yes, the Banking services have already been integrated. We intend to ease the entire corporate processes. As the processes are broken and entirely based on trust and a nexus of individuals who would deliver the incentives, rewards, or reimbursements. We wanted to spot these flaws in the process and come up with solutions that would be quick enough to accelerate these processes.
For instance, if a customer swipes a card for his transaction the merchant gets the payment after a few days. Although the processes are entirely electronic these days merchants do not receive the money instantly. This is because Banks enjoy the float and also there are a few obligations that need to be met before processing the money to the account.
We want to automate this entire process. The moment the customer swipes the card it should reflect in the merchant’s Bank account within just twenty minutes. This can only happen when there are digitally integrated systems. In India, one can practically digitize everything and the scope for that is humongous. The only thing to look at is whether the entire process is worthwhile.
How do you convince the corporates of your products and services?
Many companies already have existing software installed with them. In that case, we converse with them and try to understand what they already have and after that we undergo a study and inform them that if they implement our program it will become better and the ROI will be higher than the existing rates. Also, some companies do not have any kind of software and are willing to begin with the software provided by us.
Based on the kind of company we are pitching to and the data analysis we have undergone, we pitch to our clients. There are also times when corporate entities have their own channel incentive systems and they just require our cards. In such circumstances we ask them to provide their demo link and after having a look at their software. We pitch them the services that are missing in their platform.
The corporate market is hard and corporate sales are always the toughest. However, we have been able to successfully convert more than 4500 clients until today and we have released more than 40 million cards in the market. That has been something really very positive for us.
Sometimes the corporate are not updated with recent developments. Hence we constantly keep sending newsletters and even customized letters specifically targeting a particular segment and the new things that can be used. We send customized newsletters for the tyre industry, pharmaceutical industry and so on.
How are you coming up with new pitches, so that customer’s impediments can be removed? How does the product and tech team work? Can you give me an overview of that?
We have the best tech team for our products. Most of them are from IIM Ahmedabad, IIM Bangalore and the team is quite seasoned. Our tech team comprises more than sixty members. Before coming with a product, the product manager runs an analysis of the market based on various parameters. One of them is the features they are providing, the kinds of features that are already present, and the ones that are missing in the market. Then he checks the reviews of those products to understand whether clients of a specific product are looking for a specific feature that they don’t offer.
Based on that, the product manager runs a survey among the clients to understand whether they want the feature in a product that we can offer. Based on the results we go-ahead to develop the product. Sometimes, even clients using our products come up to us and tell us to integrate certain features that are missing in the products and which they need in their daily usage. Based on that the team manager runs a PRD – Product Requirement Document which is then passed on to the tech team who tries to understand the features to be incorporated and then it is broken down into sprints and then the features are developed and tested by the team and deployed. This entire process is called CICD – Continuous Improvement and Continued Development.
Can you elaborate on your product team?
The product team is headed by Rajshekhar Gopisetti who is the chief product officer and our and our chief technology officer is Siva Kumar. The product team is is based out of Hyderabad.
What are the strategies that you are adopting to enhance your client base?
We use both inorganic and organic strategies to enhance our client base. Using the inorganic way we sometimes acquire companies that have a good client base. The organic strategies involve word of mouth, digital sales, cold calls and partnerships. For instance, we have partnered with Yatra who looks after the travel and we look after the expense management. Hence in this way, we follow the process of acquiring customers and add value to them.
We also get leads and work on those leads and demonstrate our products to them. We decide a target for a particular year and allocate the target among the ten offices across India. Digital campaigns and partnerships are carried out through these offices to acquire new partners who can sell Zaggle’s products.
So coming back to your products, you have expense management software, reward-giving platform and Banking services too. Can you elaborate a bit on the pillars of these products?
In our customers, the pillars are the HR department, finance department, marketing department. Anything related to HR, finance department, marketing and sales is our focal point. Corporates are extremely large and hence at the present are just focusing on a few areas in the corporate. For instance, within the finance sector there is Banking, accounting, reconciliation. Based on these we come up with a product.
What is the profit that you want to earn by 2025?
We are targeting to achieve GTV worth Rs 1 lakh crore by 2025. For this year our revenue is about to reach Rs 12,000 crore.
Are there any other countries that you are focusing on for your business operations?
Other than India, we are LIVE in Canada and about to start our operations in London soon.
How are your overseas operations being managed? Are there separate teams over there?
The Canada office comprises three-four people. However, all the operations are controlled and managed from India. The office in London has not commenced yet due to the pandemic. We have limited the number of employees in our overseas offices due to the pandemic. We will increase the number of employees once the situation becomes stable. By the end of September 2021, we will get a fair idea of how we can run our overseas operations smoothly.
There are many international companies that are setting their foot in India, including Japanese and American companies. How are you planning to tap these companies?
International manufacturing companies have been present in India for a long time and most of these companies are based in North India. Especially the Japanese companies’ like Toshiba, Bosch, Panasonic, etc. They keep spreading their businesses across India for development. With most of these companies, we have some form of relationship. The advantage that we have while tapping new MNCs is that we have a lot of existing MNCs as our clients and they are also able to figure out if the products are what they need.
When you acquire new clients, a lot of data is generated. this data contains a lot of information about other clients. How do you take advantage of these data points?
Data is a very sensitive asset. Hence, we use the data for just BI – Business Intelligence and to understand the trends. Other than this, we do not make use of client data. We are under stringent compliance norms about using such data. The GDPR is also going to be implemented in India soon and the country is entirely going to be data compliant. Hence we use the data purely for honing our products and services.
Based on these data do you give your clients business services for their internal needs?
Yes. We create many custom reports for them. We also provide them with market intelligence. We advise them to look at a particular segment where there is a lot of demand. For instance, for one of the Paints company, we suggested that their paint should be like nail polish. This was a part of the studies we conducted; we realized that young girls applying nail paints want vibrant colors. Whereas the paint industry is 100 years behind them, hence we asked them to incorporate new and vibrant colors which the current generation wants.