Gifting delight, making growth

While some entrepreneurs go the creative way, there are others who use creativity to simplify the process. Avinash Godkhindi has made interesting twists in the prepaid gifting scenario. Generating $1 million in the first seven months of operation, they seem to have just begun their historic journey of success.

How did the shift from Citibank to Zaggle take place?

I launched PremierMiles when I was in Citibank, which was probably the highlight of my career. It was a great experience. After being with PremierMiles for 18 months, funds and excitement were tapering and learning was going down. I realised I have to look for another role. I always wanted to get into entrepreneurship, but I did not think it would happen so soon. I was probably thinking of doing it in three to four-year time, so when this opportunity came up I found it perfect. I had good understanding of this field and I met the people who had very good reputation. So, it made a perfect sense for me.

How did the idea for Zaggle come into existence?

The founder of our sister concern eYantra, Phani Raj, is the founder of Zaggle as well. eYantra is the market leader in corporate gifting space of physical goods. In 2006-2007, the trend of virtual gifts started gaining momentum in the corporate gifting space. So, we wanted to get into virtual gifts. Phani saw the opportunity, i.e. a different business with the same set of customers along with new age and new technology. We realised that gifting was only a part of the prepaid game, there were so many other things that we do consciously or subconsciously using prepaid instruments. That was where the potential of business came around.

Tell us about the challenges you faced.

eYantra was already working with established brands so it was not difficult to get brands to understand our business idea. As there were very few players in the prepaid space, there were no set principles. We figured out how much amount was required to run this business. Unlike the physical gifting space where the investment was not that significant in terms of technology, here we had to make investment in technology. We also made investment in doing the market research.

Why the name Zaggle?

Purely, because it is a youthful name. The idea was to come up with something that signifies fun that the brand brings to consumers.

Please explain the business model of Zaggle.

We are currently doing trading in various prepaid instruments. It works as a foreign exchange. The typical scenario in foreign exchange is to buy low and sell high and buy in bulk and sell in retail. We work with merchants who understand that we have the capability to sell their vouchers and instruments. We buy in bulk and get a certain percentage of discounts from the merchant and then pass on the same to corporate houses. This includes gift vouchers and cards of merchants, bank gift cards and Amex gift cards that we recently have tied up with. Instruments like Sodexo meal pass are also included.

How Zaggle’s experience differs from others in the market?

We offer a lot of choices to a consumer. Generally, you may get a product that may not be of your liking. Nowadays, it is difficult to know even what your sibling wants. We have gone a step ahead and are offering choice of goods as well as brands of retail experiences. We make it convenient for a consumer. We allow people to personalise the cards. For example, if you want to give a gift at a wedding, we offer personalised envelop with a nice card with the name of the groom and bride. If someone seeks revalidation of a voucher as he/she has forgotten the voucher or forgotten to use it, even if the merchant does not do it we buy a new voucher and give it. That is hugely appreciated.

Zaggle is backed byArgonaut private equity and Ventureast along with Phani Raj. How did the collaboration take place?

Argonaut private equity and Ventureast are also investors in eYantra. They did a lot of due diligence. So, there was a certain amount of confidence that Argonaut and Ventureast had in Phani. That was why, they invested in eYantra and investing in Zaggle was just a logical progression because in some way, it was the similar industry. Moreover, the founder remained the same.

What are Zaggle Super Card and Zaggle Wave?

Bringing in five merchants together and looking at the convenience of a consumer to make impulse purchase is Zaggle Wave. Super Card is more of a planned purchase. It gives you far greater freedom than Wave because your merchant set is now not restricted to five but to all major brands in India, currently over 60 merchants. Zaggle Super Card (ZSC) can be redeemed against gift vouchers and cards from over 150 brands on Zaggle.in. If you have Rs 5000 in that card you can take Rs 1000 worth of Dominos, Rs 2500 worth of Lifestyle, Rs 500 of Café Coffee Day and Rs 1000 of Landmark. You can also choose to redeem Rs 2000 now, Rs 3000 after three months. We ship the vouchers to you free of cost within seven working days, typically much sooner, because we have a certain stock.

What is the current employee strength?

At present, we have 27 people. We want to time our expansion with the launch of Zaggle Wave. By the end of this financial year, we should be about 55 to 60 people.