Zaggle To Acquire 45% Stake In Effiasoft For INR 36.7 Cr

SUMMARY

Zaggle said it will acquire the stake from Effiasoft cofounders Koushik Shee and Akula Krishna Rao in an all-cash deal

The company’s board also approved a proposal to acquire an additional 5.67% stake in Effiasoft from Shee and Rao for INR 4.59 Cr

Founded in 2012, Effiasoft offers end-to-end software solutions for PoS devices, inventory management and customer loyalty

Fintech SaaS company Zaggle plans to acquire a 45.33% stake in point of sale (PoS) software solutions provider Effiasoft for INR 36.72 Cr in an all-cash deal.

In an exchange filing, Zaggle said it received the approval from its board to acquire the stake from Effiasoft cofounders Koushik Shee and Akula Krishna Rao.

“… This is to inform you that the meeting of the board of directors of Zaggle Prepaid Ocean Services Limited (company)… has, inter alia, approved the acquisition of 45.33% stake in… Effiasoft…, from Mr. Koushik Shee and Mr. Akula Krishna Rao, existing shareholders, for consideration of INR 36.72 Cr,” the filing said.

Besides, the company’s board also approved a proposal to acquire an additional 5.67% stake in Effiasoft from Shee and Rao for INR 4.59 Cr. The mode of the deal, whether cash or share swap, will be decided at a later stage by the board.

Zaggle plans to complete the transaction in the next 90 days.

The listed fintech SaaS company said that the acquisition will enable it to leverage Effiasoft’s expertise to enhance its tech stack by “accelerating product development, improving operational efficiency, strengthening payment processing capabilities, increasing merchant engagement, and driving digital transformation in the fintech space”.

Founded in 2012 by Shee and Rao, Effiasoft offers end-to-end software solutions for PoS devices, inventory management and customer loyalty. The startup claims to cater to 300+ merchant partners across sectors such as retail, distribution, shipping, airlines, banking, among others.

As per the filing, Effiasoft’s turnover stood at INR 8.39 in FY22 and grew to INR 13.43 in FY23. The enterprise tech company’s turnover stood at INR 18.94 in the fiscal year ended March 2024. Based on provisional unaudited financial statements, the company’s turnover rose to INR 24.67 Cr in FY25, as of March 15.

Zaggle’s Acquisition Spree

The development is in line with Zaggle’s strategy for inorganic growth. In December last year, sources told Inc42 that Zaggle was looking to undertake three more investments and acquisitions by March 2025 to expand its offerings and top line.

In February, Zaggle’s board approved the acquisition of an additional 16.67% stake in digital payments service provider Mobileware Technologies in an undisclosed cash deal. Earlier this month, the company acquired an additional 12.34% stake in Mobileware for INR 7.25 Cr.

In September 2024, the listed company also acquired an additional 53.32% stake in Span Across IT Solutions for INR 320.3 Cr.

Founded in 2011 by Raj Narayanam, Zaggle offers a spend management and corporate employee benefits platform which helps businesses automate their accounts and issue prepaid cards. Its portfolio of SaaS products also includes tax and payroll software.

On the financial front, the company saw its net profit rise 30% to INR 19.74 Cr in Q3 FY25 from INR 15.22 Cr in the year-ago quarter. Revenue from operations soared 69% to INR 336.89 Cr during the quarter under review from INR 199.51 Cr in Q3 FY24.

Shares of Zaggle ended today’s trading session 5% higher at INR 344.65 on the BSE.