Funding Alert

Zaggle Raises Rs 25 Crore in Private Placement from ValueQuest Scale Fund, Total Funding Reaches Rs 98 Crore

• ByStartupStory     |    August 23, 2023

Zaggle Prepaid Ocean Services, a fintech company specializing in Software-as-a-Service (SaaS) for financial solutions, has secured an investment of Rs 25 crore through a private placement from ValueQuest Scale Fund.

This funding from ValueQuest Scale Fund follows the recent pre-IPO placement in which Zaggle raised Rs 73 crore. In total, the company has now amassed Rs 98 crore through these investments.

As part of its pre-IPO placement, Zaggle allocated 15,24,390 equity shares at a price of Rs 164 per unit, amounting to Rs 25 crore. This step was taken in consultation with merchant bankers and was communicated to investors on August 22.

In a previous move, Zaggle allocated 44.51 lakh equity shares at the same price to six investors, including Ashish Rameshchandra Kacholia, Bengal Finance and Investment, Himanshi Kela, Absolute Returns Scheme, Vikasa India EIF I Fund – Incube Global Opportunities, and Acintyo Investment Fund PCC – Cell 1.

With the approval for an upcoming IPO, Zaggle, a key player in spend management with a distinctive value proposition and diverse user base, intends to raise approximately Rs 663 crore. This IPO plan comprises both fresh share issuances worth Rs 490 crore and an offer-for-sale (OFS) of 1,05,26,316 equity shares by promoters and investors.

Considering the impact of the pre-IPO placement, the size of the fresh issue could be reduced to Rs 392 crore from Rs 490 crore. The company has indicated the potential reduction in the fresh issue size based on the pre-IPO placement.

In this scenario, the anticipated total offer size of the Zaggle IPO might be approximately Rs 565 crore.

The selling shareholders in the OFS include promoters Raj P Narayanan, Avinash Ramesh Godkhindi, Zuzu Software Services (the largest public shareholder with an 18.95 percent stake), VenturEast Proactive Fund LLC, GKFF Ventures, VenturEast SEDCO Proactive Fund LLC, Ventureast Trustee Company, Koteswara Rao Meduri, and Malvika Poddar.

The proceeds from the fresh issue, excluding offer expenses, will be primarily allocated for customer acquisition and retention (Rs 300 crore), technology and product development (Rs 40 crore), and debt repayment (Rs 18 crore). Zaggle has maintained profitability for the past three financial years. The remaining funds will be used for general corporate purposes.

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