The fintech Zaggle has entered into the neobanking space. The company has launched the neobanking initiative through its group company, ZikZuk with the objective of addressing the major challenges faced by SMEs.
The first product that is being launched is the Founders Card – a credit card for SME owners under its group company ZikZuk. The company is aiming to clock in a revenue of Rs. 250 cr in its first year of business (equal to roughly $34.2 million), alongside reaching out to a total of 100,000 SME’s within the next 3 years.
ZikZuk took into consideration the many challenges faced by founders, including accessing credit, meeting business expenses, and managing working capital. Hence, it will continue to focus on providing accessible availability to credit for the SME segment to fully address and manage their financing and liquidity issues.
The three primary products that will be a part of this initiative to start with include:
- Founders Card – South Asia’s first business infinite credit card curated for the needs of the SME owners and founders that manages their business expenses and credit requirements.
- Business Finance Manager – A financial operating system that manages the entire business finance for SMEs, including AR/AP management, cash flow management, working capital management, and inventory management; whilst also suggesting the best possible options available to facilitate further business growth.
- Multibank Account Aggregation – Aggregate current and savings accounts of SMEs on one platform to check the account balance, make fund transfers (NEFT, IMPS, RTGS), view & download account statements, recent transactions, and transaction segments.
Companies today require multiple payment instruments for running their business (Credit, Prepaid, Forex), yet there remains a distinct lack of such platforms where these types of expenses and disbursements can be seamlessly tracked in a holistic manner. The Founders Card is a single payment instrument that can be used to optimise working capital and digitally manage all the expenses that occur with running an SME.
Commenting on the development, Raj N Phani, Founder of Zaggle said “In order to ensure proper risk management for its portfolio, the company will get directly hooked into the customers accounting system which will enable continuous risk assessment and monitoring. This credit facility offered by ZikZuk will enable SMEs to streamline their working capital cashflows and is in sync with global developments and offerings in this space.”
The base for lending will be the cashflows of SMEs and the offering will be complementing existing systems.
Speaking about the business opportunity in the neo-banking space, Raj further added, “the market for this offering is very attractive in terms of size and spread with experienced players understanding the SME space operating into it. The company will begin servicing traders and businesses through these offerings, and will gradually move to manufacturers, while geographically it will first commence with metros and then develop to other towns and cities in India.”
SME owners and founders are always busy growing their sales and business, and want to know the entire financial status of their company whilst managing cash flows, as it’s a critical component to the success of SME business. ZikZuk’s Business Finance Manager acts as a financial command centre for SMEs to manage their business through the platform.
ZikZuk’s multibank account aggregation module will help SME owners and finance teams to use the platform to access multiple bank accounts and perform banking transactions, instead of hopping through multiple bank portals.
Zaggle, the parent company, currently works with three banking partners including Yes Bank, RBL Bank, and IndusInd Bank, and intends to sign up multiple partners for its neo-banking initiative. ZikZuk is looking at cash-flow-based lending and will have strong risk assessment methods and processes in place.
Zaggle has been funded by eYantra, Ventureast, and Argonaut Ventures, and has experienced exponential growth through the last year alone. The company turned profitable with 14-times growth in Profits in FY 2021.