Confident of achieving 45-55% growth this financial year: Avinash Godkhindi, Zaggle Prepaid

"We are providing them our Save platform, which is our platform for employee benefits and expense management and that is something that allows us to scale with a whole host of programmes in the future with Hero MotosCorp," says Avinash Godkhindi, Co-Promoter, MD & CEO, Zaggle Prepaid.

Let us talk about this agreement. Can you give us more details on the project? What kind of revenue potential we can expect?
Avinash Godkhindi: It is a great name, Hero MotoCorp. It is a great brand, huge potential. It is a large employee base running into thousands of employees. We are providing them our Save platform, which is our platform for employee benefits and expense management and that is something that allows us to scale with a whole host of programmes in the future with Hero MotosCorp.


Is this your first tie-up with any automobile company?
Avinash Godkhindi: No, we have worked with many-many automobile companies.

Post-IPO, how many new clients you have added? I am just trying to understand that how exactly is your business is expanding?
Avinash Godkhindi: So, our business is expanding in multiple ways. We have added lots of clients. Last year, we added about 650-odd clients. We are also focusing on larger enterprise accounts because it is very clear that we need to be able to pick up the ones where we have higher revenue potential and higher profit potential in the eventual years. We are also seeing growth on cross-sell. We are seeing growth with more uptake with existing corporates where they are just adding more users. We are seeing more banks sign up, as previously we had announced the sign-up with PNB, with Indian Bank, with Canara Bank, Axis. So, post-IPO, we have had a whole host of these banks, Kotak, who signed up with us.

You enjoy certain advantage largely because of the way the business proposition is when it comes to tax advantages. Some would say that those tax advantages which companies enjoy when they are giving perks to their employees could be challenged because of the way how government is increasing the entire tax basket so to speak. Could that be disruptive for you?
Avinash Godkhindi: No, not at all. I think it is great that the government is increasing the tax basket. All of us realise that with 1.62% of the country's population paying taxes, this has to change and grow. Overall, the burden is too high on a few and as the number of people who are coming into the tax ambit increase, their desire to save taxes through the mechanisms that are offered by the government, that will also increase.

So, it is great that more and more people are coming into the formal sector and organised employment. And as they come into organised employment, they get PF, ESIC, they pay your taxes and eventually they want to save on those taxes.

But the question is also that the spend of all of those customers is also increasing? And if that is right, what kind of growth expectations should we have? Is 50-55% a realistic target for FY25?
Avinash Godkhindi: Yes. In fact, this last quarter, we grew more than double, almost 120%. So, we grew fairly good numbers. So, we are very confident of being able to hit our guidance of 45% to 55% growth this financial year. And last quarter, we have already mentioned that we will close somewhere in the range of 240 to 260 crores, year-on-year, we were at 118 crores last year in Q1.

Are your nearest competitors let us say in the listed and the non-listed space.
Avinash Godkhindi: In the listed space, we do not have any direct competitors. Globally, we have companies like Brex, Ramp, Pleo, Spenmo, Spendesk. Fleetcor which is Corpay now is a listed company in the US, $19-20 billion valuation.

Brex, again, a listed company in the US, running to billions of dollars of valuation. So, there are a lot of these global players who are multi-billion dollar companies. In India, we do not have a like-for-like comparison in the listed or even in the unlisted space.

IT services, I am asking a very basic question because when we discuss Zaggle internally, they say, okay, let us understand the business model. You are not IT services company. You are not in SaaS. You are not a product company. How would you like to differentiate yourself because the three broad categories in which I understand businesses, you do not fit in, but you fit in.
Avinash Godkhindi: Yes. So, we are a spend management SaaS fintech. We generate revenues, obviously through SaaS. We also generate revenues through transactions. So, if you look globally at SaaS companies, there are a lot of SaaS companies who generate revenues beyond your software, where they earn on the transaction as well.

So, look at companies like Brex, for example, or Ramp, or Pleo. So, this is a fairly established model globally where you earn on software, but you also earn on transactions. In spend management, it is the model and we are the pioneers of that approach in India. And my submission to your viewers would be, if I am able to monetise through multiple ways, why not?