Zaggle makes entry into neo banking with launch of ZikZuk
Zaggle Prepaid Ocean Services, which operates expense management platform Zaggle, is venturing into neo banking with the launch of a new arm called ZikZuk. The first product to be rolled out by ZikZuk will be a credit card, dubbed Founders Card, focused on small and medium enterprise (SME) owners.
The neo banking company aims to touch a gross transaction value of Rs 250 crore for the Founders Card in its first year of business. It expects to reach one lakh SMEs over the next 2-3 years, Zaggle said in a statement.
The company has also lined two more products for release -- a financial operating system and a multibank account aggregation facility. The former will handle cash flow management, working capital management and inventory management, while the latter will provide features such as checking account balance, making fund transfers, viewing of recent transactions and downloading statements.
“The market for this offering is very attractive in terms of size and spread.” Zaggle founder Raj N Phani said.
According to a Ministry of Micro, Small and Medium Enterprises 2019 report, the MSME sector consists of 6.33 crore enterprises out of which 99.4 percent are micro enterprises, which means they employ less than 10 people.
The company will initially service traders and services businesses through these offerings and gradually move to manufacturers. In terms of geography, it will start with the metros and move on to other towns and cities across the country.
Phani, a serial entrepreneur, founded Zaggle in 2011. The company uses deeptech and artificial intelligence to provide solutions for expense management, employee reimbursements and rewards. It is backed by investors such as eYantra, Ventureast and Argonaut Ventures.
ZikZuk will compete with other neobanking entities such as Tiger Global backed Open, Singapore based fintech solutions provider Atlantis, Yono by SBI, RazorpayX, and NiYo.