A day after raising an undisclosed sum in a Series C funding round from Sodexo, Bhavin Turakhia-led fintech firm Zeta is merging its employee benefits business with Sodexo Benefits and Rewards India (BRS India), an Indian unit of the France-headquartered Sodexo.
Zeta, which offers enterprise payments solutions and neobanking services, raised an undisclosed amount of funding from Sodexo on Wednesday. It was the company’s first external round of funding.
The Series C investment valued Zeta at $300 million (Rs 2,072 crore at the current exchange rate), the company claimed.
The new deal, subject to regulatory approvals, will bring together Sodexo’s domain expertise, proprietary merchant network and Zeta’s technology capabilities together to create a stronger brand in the corporate employee benefits space, Zeta said in a press statement.
“Our platform enables the creation of tailor-made consumer experiences and can scale up to billions of transactions per day,” Turakhia said. “Zeta’s technology is deeply integrated with Sodexo and the merger will enable both teams to work even more closely to develop innovative solutions."
Sodexo and Zeta have been working together in a strategic partnership since May 2017, and the latter’s technology platform has been powering Sodexo’s digital employee benefits solutions, the statement added.
Sodexo transformed to a 100% digital solution in February 2018, and the company leveraged Zeta’s tech platform to launch a complete suite of business-to-business solutions.
The two businesses together will serve close to 14,000 clients and 3.5 million consumers, the statement said.
Zeta will take a minority stake in the merged entity, which will retain the Sodexo branding, The Economic Times reported. Zeta is also likely to get a board seat in the new entity.
Apart from its employee benefits business that includes automated cafeteria and employee gifting, Zeta offers a cloud-native neobanking platform for the issuance of credit, debit and prepaid products. The company operates its technology business as a separate entity.
The company was co-founded by Turakhia and Ramki Gaddipati in 2015.
Zeta was internally funded through diversified tech company Directi, founded by brothers Bhavin and Divyank Turakhia, which runs multiple lines of businesses including calling app Ringo, enterprise communication app Flock, internet domain registration name platform Radix, and Zeta which started out as a digital meal benefit product for employees.
Bhavin's brother Divyank sold his ad-tech company Media.net to a consortium of Chinese companies for $900 million in August 2016. In 2013, Turakhias had made $160 million selling their web presence business to Nasdaq-listed Endurance Group.
Zeta works with multiple industry players including RBL Bank, IDFC First Bank and Kotak Mahindra Bank.
France-headquartered Sodexo has a presence across 72 countries and offers food services and facilities management. Sodexo India partners with over 11,000 clients offering a range of solutions including meal benefit, gifting and recognition offerings. Sodexo claims to be reaching over 3 million daily consumers in India across 1,700 cities. In addition, Sodexo has deployed over 100,000 unique points of acceptance across India.