# Zaggle Deep Dive: The Rails Behind Employee Spend

> Zaggle is building a full-stack business spend platform—cards & payments, travel/expense, and employee benefits—to make company spending programmable.

**Companies**: Zaggle Prepaid
**Sectors**: Technology
**Published**: 2026-03-18
**Last Updated**: 2026-03-18
**Source**: https://thesisloop.ai/thesis/e5f93715-2f95-481e-830b-5f76a2e433bb

## Score Overview

| Company | Management | Business Model | Future Growth | Risk |
|---------|-----------|---------------|--------------|------|
| Zaggle Prepaid | 74/100 | 77/100 | 71/100 | 62/100 |

## Zaggle Prepaid (BSE:543985)

**Sector**: Technology | **Industry**: IT Enabled Services

### Management Credibility

- **[CATALYST] GST and Tax Compliance Automation** (POSITIVE, MET): The company successfully completed the acquisition of TaxSpanner during the quarter, meeting the inorganic growth objective. (3 met, 2 in progress across 5 tracked commitments)
  > But this year, we look at a growth of about 60% to 70%, which we expect that we will be able to do it with relative ease.
- **[METRIC] Automation-Driven Cost Savings Delivered** (POSITIVE, MET): Adjusted EBITDA for Q1 FY26 reached INR 33 crores on revenue of INR 331 crores, representing a ~10% margin, aligning with the lower end of the guided range for the full year. (1 met across 1 tracked commitment)
  > With these changes, we envisage savings of around INR25 crores over the next 1 year.
- **[METRIC] Client Retention Rate** (POSITIVE, IN_PROGRESS): With 9MFY26 revenue at INR 12,601 million already exceeding the full year FY24 revenue of INR 7,756 million, the company is on track to meet the doubling target by FY26. (1 in progress across 1 tracked commitment)
  > Revenue from operations: 12,601.0 [9MFY26] vs 7,756.0 [FY24]
- **[METRIC] Revenue per Full-Time Employee** (NEUTRAL, IN_PROGRESS): Management reiterated the expectation of approximately INR 100 million in ESOP expenses for FY25. (1 in progress across 1 tracked commitment)
  > During FY25, we expect to record total ESOP expenses close to INR100 million.
- **[PRINCIPLE] Multi-Shore Delivery Model Optimization** (NEUTRAL, REVISED): Management is actively working on the GTM strategy and product-market fit for the US. They clarified that significant revenue is not expected from this entry within the current fiscal year. (2 in progress, 1 revised across 3 tracked commitments)
  > We don’t believe that we will generate significant revenue from the US entry this year, but in the coming years, that could be very, very significant.
- **[PRINCIPLE] Service Delivery Automation Ratio** (POSITIVE, MET): Adjusted EBITDA margins for Q1 FY25 stood at approximately 10.1%, which management considers steady and in line with their range of expectations. (5 met across 5 tracked commitments)
  > Zaggle's AI-driven chatbot, RazBot... has achieved a deflection rate of 60%. And we intend to enhance the deflection rate to about 99%.
- **[TREND] India's BPM Market Growing at 7.9% Domestically** (POSITIVE, EXCEEDED): The company reported actual revenue growth of approximately 68% for FY 2025, significantly outperforming the initial guidance range of 45-55%. (5 exceeded across 5 tracked commitments)
  > In 2025, which is FY '25, we aim to grow our revenue by anywhere between 45% to 55%.
- **[TREND] Shift to Business Process as a Service (BPaaS)** (POSITIVE, IN_PROGRESS): Management confirmed they are actively seeking M&A opportunities with a focus on SaaS Fintech, NBFC, and Payments, supported by a board-approved fundraise of Rs. 9,500 Mn. (4 in progress across 4 tracked commitments)
  > We are strongly focusing on M&A’s with a combined strategy of small tuck-ins and larger investment opportunities... taken approval from the board of directors for a fund raise of up to Rs. 9500 Mn.
- Zaggle significantly outperformed its upgraded FY25 revenue guidance, achieving 68% year-on-year growth. (1 exceeded, 4 met across 5 tracked commitments) (POSITIVE, EXCEEDED)
  > with the current business projections, we intend to double our revenue over the next two years.

### Business Model

- **[CATALYST] BFSI Regulatory Technology Demand** (POSITIVE, Change: EXPANDING): Program fees (interchange) grew 70% annually for FY25, though quarterly growth was a more moderate 15% as the company prioritized higher-margin transactions and reduced incentives. (4 expanding)
  > while program fees grew by 15% Y-o-Y... We observed a 70% Y-o-Y increase in the interchange fee which has become a significant contributor to our revenue.
- **[CATALYST] GST and Tax Compliance Automation** (NEUTRAL, Change: STABLE): SaaS fees grew 19.8% YoY, supported by the deployment of Save and Zoyer platforms for non-capex purchase management and travel expense visibility. (1 expanding, 1 stable)
  > SaaS fee increasing 19.8% on Y-o-Y... Zaggle platform fee contributed to about INR10 crores.
- **[METRIC] Automation-Driven Cost Savings Delivered** (NEUTRAL, Change: STABLE): Propel points remain the largest revenue contributor at INR 275 crores, though management expects incentive costs (currently 67% of program fees) to stabilize at 50% over 5 years. (1 stable)
  > Propel points contributed to around INR 275 crores.
- **[METRIC] Client Retention Rate** (POSITIVE, Change: EXPANDING): The network effect is strengthening as aggregate users grew 17.3% to 3.3 million and corporate customers grew 14% to 3,559. (2 expanding)
  > Aggregate users on the platform (million) +17.3% Q1FY25 2.8 Q1FY26 3.3
- **[METRIC] Revenue per Full-Time Employee** (POSITIVE, Change: EXPANDING): Program fees, which are interchange fee shares from banks, grew significantly by 69.5% for the full year FY25, driven by increased card usage and new banking alliances. (1 expanding)
  > Program fees FY24 3,218 FY25 5,456 69.5%
- **[PRINCIPLE] Client Relationship Depth and Mining** (POSITIVE, Change: EXPANDING): The network effect is expanding as the company added over 400 new corporate customers and reached 3.28 million aggregate users, maintaining a very low churn rate of less than 1.5%. (5 expanding)
  > ZAG.money establishes our 4th monetization pillar, a captive high-intent base of 3.7 million salaried users.
- **[TREND] Analytics and AI Ops Growth** (POSITIVE, Change: EXPANDING): Propel platform revenue showed the strongest growth among segments, expanding 46.8% YoY in Q2 FY26. (1 expanding)
  > Propel platform revenue Q2FY25 1,679 Q2FY26 2,466 +46.8%
- **[TREND] India's BPM Market Growing at 7.9% Domestically** (POSITIVE, Change: EXPANDING): Program fees grew 15% YoY in Q1, which management described as a 'tepid' start due to seasonality and geopolitical impacts on travel, though they maintain a 35-40% full-year growth guidance. (1 expanding)
  > Program fees contributed to about INR145 crores... The revenue has increased by about 15%.
- **[TREND] Shift to Business Process as a Service (BPaaS)** (POSITIVE, Change: EXPANDING): Propel platform revenue, which involves the gross reporting of reward points, saw the highest growth among segments at 70.8% for FY25, reflecting strong adoption of the rewards and recognition platform. (5 expanding across 1 engine)
  > SaaS platform fees contributed to around INR 12 crores
- Propel platform revenue saw massive expansion, nearly doubling year-on-year in Q4, driven by performance in Zoyer and BROME solutions. (3 expanding, 1 shifted across 3 engines) (POSITIVE, Change: EXPANDING)
  > Program fees... Q3FY26 2,111... 55.8%

### Future Growth

- **[CATALYST] BFSI Regulatory Technology Demand** (NEUTRAL): Draft Income Tax Rules 2026 extending tax benefits to the New Tax Regime is expected to significantly increase the user base for 'Save' and 'TaxSpanner' products.
  > employee tax benefits have been extended to the new tax regime, which is a huge kicker to us
- **[CATALYST] GST and Tax Compliance Automation** (POSITIVE, Trend: NEW_TREND): The company has initiated a new growth trend by acquiring Span Across IT Solutions (rebranded as Zagg.Money) to integrate tax filing and financial wellness into their SaaS platform, targeting a massive expansion in revenue per user. (3 new trend across 3 signals)
  > We have made a strategic investment in a company called Span Across IT Solutions Private Limited. Span Across offers digital products for online tax filing and financial wellness solutions... increasing the value proposition for our customers.
- **[METRIC] Revenue per Full-Time Employee** (POSITIVE, Trend: STEADY): The company is leveraging its 3.71 million aggregate users (up 17.5% YoY) to drive its fourth monetization pillar through the Zagg.Money acquisition. (1 steady across 1 signal)
  > Aggregate users on the platform (million) Q3FY25 3.16 Q3FY26 3.71 (17.5% growth)
- **[PRINCIPLE] Client Relationship Depth and Mining** (POSITIVE, Trend: ACCELERATING): Zaggle is aggressively pursuing cross-sell opportunities, specifically with the Zoyer platform for accounts payable and petty cash, seeing high acceptance in multi-location businesses like Subway and Dr. Batra's. (2 accelerating, 3 new trend across 5 signals)
  > this acquisition introduces our fourth monetization pillar – our salaried base of over 3.7 million users where we aim to build a high-margin business with revenues of INR 5,000 million
- **[PRINCIPLE] Service Delivery Automation Ratio** (POSITIVE, Trend: ACCELERATING): Zaggle is accelerating its technology investments, specifically in AI capabilities like the 'Raz bot' chatbot, to differentiate its product offering and improve operational efficiency. (5 accelerating across 5 signals)
  > The rollout of our Agentic AI workflows is already enhancing automation across vendor reconciliations, compliance monitoring, and end-to-end spend approvals.
- **[TREND] Analytics and AI Ops Growth** (POSITIVE, Trend: ACCELERATING): The company reported a massive 113% Y-o-Y revenue growth in Q1 FY25, driven by the successful rollout of new products like Zoyer. Management is confident in doubling FY24 revenues (Rs. 775 crores) within the next two years, indicating a steady to accelerating trajectory for the new product segments. (2 accelerating across 2 signals)
  > For Q1 FY25 ending June 30, 2024, I am pleased to inform that the revenue grew at a healthy rate of 113% on a Y-o-Y basis... We remain very confident of doubling our FY24 revenues, which were Rs. 775 crores, to double in the next two years.
- **[TREND] India's BPM Market Growing at 7.9% Domestically** (POSITIVE, Trend: ACCELERATING): Revenue growth is showing massive acceleration, up 112.9% YoY, driven by the Zoyer platform and credit card bundled solutions, with a target of 45% to 55% growth for the full fiscal year. (4 accelerating across 4 signals)
  > Revenue from operations (₹ Mn) Q1FY24 1,185 Q1FY25 2,522 (112.9% growth). The growth is largely led by strong demand for Zoyer and Credit card bundled solution.
- **[TREND] Shift to Business Process as a Service (BPaaS)** (POSITIVE, Trend: ACCELERATING): Revenue growth is accelerating significantly, with H1 FY25 revenue up 83.3% YoY. The company has increased its full-year FY25 topline growth guidance to 50-55%, supported by the expansion into retail financial products and new SaaS offerings. (1 accelerating, 4 new trend across 5 signals)
  > Looking ahead, we are upping our guidance to 50-55% growth in our topline for FY 25. We are very confident of doubling our FY24 revenues in the next two years.
- Revenue growth is accelerating, leading management to upgrade their full-year revenue growth guidance to 40-45%. The Propel platform, a key part of the monetization strategy, showed 48.4% YoY growth in H1. (1 accelerating across 1 signal, 2 leading indicators) (POSITIVE, Trend: ACCELERATING)
  > ZAG.money establishes our 4th monetization pillar... earmarked a primary capital infusion of about INR 100-plus crores.

### Risk Assessment

- **[CATALYST] BFSI Regulatory Technology Demand** (POSITIVE): Concentration risk is easing through diversification of the partner ecosystem, now reaching 16 bank partners and multiple network providers (Visa, Mastercard, RuPay). (2 easing, 1 stable)
  > 16 Bank partners; #1 Prepaid Card issuer in country
- **[CATALYST] GST and Tax Compliance Automation** (NEUTRAL): The risk is stable; Q1 was confirmed as a 'tepid' quarter due to seasonality and geopolitical impacts on travel, leading to a temporary slowdown in program fee growth (15% vs 30-40% annual target). (1 stable)
  > Q1 traditionally has been a slow quarter for us because of the seasonality in the business... some of the travel got impacted because of the geopolitical situation.
- **[METRIC] Automation-Driven Cost Savings Delivered** (POSITIVE): The risk is easing as incentives as a percentage of program fees improved to 65-66% this quarter compared to 71% in the previous year, reflecting better operational efficiency. (1 easing, 1 stable)
  > if you look at the incentives growth, incentives as a percentage of the program fees... That is 65%, 66% this quarter versus 71% last year.
- **[METRIC] Client Retention Rate** (POSITIVE): Execution risk remains stable but well-managed as the company surpassed revenue guidance, achieving 68% YoY growth while maintaining a low customer churn rate of <1.5%. (2 stable, 2 easing)
  > FY25 revenues have surpassed our guidance, crossing the INR 13,000 million mark and achieving a 68.0% year-on-year growth.
- **[METRIC] Contract Renewal Rate and Duration** (POSITIVE): Risk is easing due to significant diversification of the partner ecosystem, now boasting 16 bank partners and a new 7-year agreement with Mastercard. (2 easing, 1 stable)
  > We have further strengthened our partnership with Mastercard by signing a seven year customer business agreement for MasterCard Premium Foreign Currency co-branded Prepaid Cards.
- **[PRINCIPLE] Client Relationship Depth and Mining** (POSITIVE): This risk is easing as management successfully reduced incentives and cashbacks this quarter by focusing on repeat usage and cross-selling to existing 'carded' users. (2 easing)
  > Now you're seeing a lot of the usage, which is also repeat of people who are using more and more on the same card... your need to on Zoyer offer higher cashback starts to go down.
- **[PRINCIPLE] Multi-Shore Delivery Model Optimization** (NEGATIVE): Execution risk is intensifying as the company moves from planning to active incorporation of subsidiaries in GIFT City and UAE (Abu Dhabi) for international expansion. (1 intensifying)
  > Board has approved the incorporation of a wholly-owned subsidiary in GIFT City... we are in the final stages of forming an entity in UAE with a view to expand in the MENA region.
- **[PRINCIPLE] Service Delivery Automation Ratio** (NEGATIVE): This risk is intensifying as depreciation and amortization expenses jumped to INR 7 crores in Q1 FY26 from INR 2 crores in Q1 FY25, driven by a significant INR 40 crore investment in in-house tech development. (3 intensifying, 1 easing, 1 stable)
  > As a result, depreciation and amortization expenses for the quarter stood at INR7 crores compared to INR2 crores in Q1 FY '25.
- **[TREND] Analytics and AI Ops Growth** (NEGATIVE): Depreciation expenses intensified significantly, rising from INR 83.6 Mn in FY24 to INR 146.9 Mn in FY25 (a 75.7% increase) due to the capitalization of new product suites. (2 intensifying)
  > Increase in depreciation expenses is largely due to capitalisation of product suites like Zatix & Fleet Solutions
- Incentive and cashback costs remain a significant portion of the cost structure (INR 955.6 Mn in Q1 FY26), but Gross Profit margins improved to 49.4% from 56.2% in the prior year's quarter, indicating some pressure on the mix. (4 intensifying, 1 easing) (NEGATIVE, Risk: MODERATE)
  > we are probably looking at a negative or a very low cash from operating activities.

### Scenario Analysis

- 3 positive impacts identified; 4 negative impacts identified (NEUTRAL)
  > IRM Energy | Zaggle Fleet Program | 5 Years
- 9 positive impacts identified; 1 negative impact identified (POSITIVE)
  > On the technology front, we have moved from AI-led vision to execution. The rollout of our Agentic AI workflows is already enhancing automation across vendor reconciliations, compliance monitoring, and end-to-end spend approvals.

---
*Generated by [ThesisLoop](https://thesisloop.ai) — AI investment research for Indian equities.*