Zeta Tech – Is IPO the next step?

 Zeta Tech – Is IPO the next step?

The newest member of the unicorn club, Zeta tech provides a full-stack, cloud-native, API-first neo-banking platform to banks and fintech.  It is a minded child of Bhavin Turakhia and Ramki Gaddipati. At present, Zeta’s platform and products are being catered to the BFSI issuers in India, Asia, and LATAM. Fintech has a digital core and a payment engine for promoting the issuance of credit, debit, pre-paid products and enables fintech institutions to innovate on digital products.

In this edition, we will bring you the fascinating story of the Zeta, India’s 14th unicorn of 2021, that has delivered a whopping 4.8X from its last round in July’19.

But before we deep dive into the journey let’s have a look on the market first

Banking software market heading?

Banking software is a $300bn industry globally and a study by Aite Group discovered that approximately 61% of executives in Financial Institutions believe that investments in modern-day technologies are a must to improve the customer experience. COVID-19 boosted the growth for this segment as it has highly impacted the work culture across every industry vertical.

In simple words, a single Financial Institution (FIs) that operates in a traditionally digitized manner has a heavy dependence on dozens of tech vendors who offer discrete pieces of functionality that are way outdated.

That’s where Zeta’s Omni Stack comes to the rescue. It has rewritten the entire banking stack; this hasn’t been done before as it provides all the functionality that previously was sourced individually under one umbrella that these client organizations need to launch new products. Zeta suite has the vision to make payment complexities invisible and seamless, and secure than ever.

Transaction volumes on the Unified Payments Interface (UPI) more than doubled in March 2021 to 2.7 billion from 1.25 billion in the same period last year.

How was Zeta born?

Zeta tech was founded in 2015 by serial entrepreneurs Bhavin Turakhia and Ramki Gaddipati. Bhavin Turakhia (CEO), mostly termed as the SERIAL ENTREPRENEUR with a startup history of 5 startups has been in the startup ecosystem for more than 22 years and has built his wealth in billions. He developed a fondness for technology at the initial stage of his entrepreneurial journey. He believes, “It is our moral obligation to make an impact that is proportionate to our potential”.

Ramki Gaddipati (CTO), with experience in Morgan Stanley, Media.net, and Flock, is also not a first entrepreneur. Prior to Zeta Suite, he led Bridle Information and Technology Solutions, a software company that created mobile apps for the education and healthcare industry in India. He was named in the ‘Asia’s Best Entrepreneurs Under 25’ by BusinessWeek in 2006 for his role at Bridle.

Ramki was a candidate for a techie position at Directi whose interview was conducted by Bhavin and that’s how they met with each other. Ramki has also an entrepreneurial spirit and the startup gave wings to this spirit as he had designed several kickass products there but failed. Ramki left Directi and went back to the US to explore the possibilities of new ideas, he kept discussing the ideas with Bhavin as they both became very good friends during his tenure at the firm.

Bhavin and Ramki had one thing in common – they wanted to pursue a space where they could fundamentally alter or make significant differences.

Revolutionizing the banking operations

The duo came up with the idea in 2015 and it took them 3 years to launch Zeta’s first use case in 2018 as the platform began with employee benefits and cards; they would charge a fee for the card swipes.

Zeta terms itself as “The World’s First Omni Stack for Banks”

They felt that the payment industry had a lot of possibilities on the regulatory level and there was also room for impact. Nobody in the payment’s ecosystem loves the way transactions are happening, it is a very tedious process happening through a tangled web of networks. Banking software was still very out-dated. As a result of leveraging disparate technology from the 80s, banking has a very slow innovation cycle that leads to delay in product launches, poor user experience, high operational costs and low income due to competition and poor cross-sell.

Due to this, there is a very big possibility that the majority of prevalent banking consumers would switch their accounts to Google/Amazon. And, these tech giants are leveraging this opportunity to the most. Banks are moving on the path of becoming dinosaurs and may have to face an extinction.

At that time, India had also opened to the idea of open banking, and the RBI has allowed account aggregator access. Regulators were taking a lot of initiative however; the tech part were outdated. Fintech were not able to provide the direct solution, they weren’t able to innovate the API and information as the bank’s tech stacks were outdated. So, there is a massive gap in the middle.

That’s where Zeta tech saw a gap and introduced the technology that has the potential to save the banking system globally. Zeta’s Omni Stack provides Speed & agility, reduced costs, and a more secure and robust tech foundation to reduce fraud, leverage cloud, reduce vendors, etcOpen Banking ready:

The founders had two options – get into neo-banking/lending space, or become a pure-play Fintech. Targeting a well-regulated market, the challenges and capital requirements were immense, so they focussed on problem-solving areas in both spaces.

When they started, their thesis was very different. They were looking at the technical possibilities in the payments business and wanted to alter the industry. To fix the problem in this ecosystem, Zeta has been built as a payment enabling technology. They had started as a source of funds – bank accounts, credit accounts, savings, etc – and created a platform that adds a modern experience on top of the source of funds.

They don’t want Zeta tech to be a fintech, neobank, or bank, but a platform to empower them.

Zeta’s idea is “We don’t build to sell but to build a $100 billion enterprise. We want to make a significant dent into the $200-300 billion global banking technology market.”

Zeta Tech Business Model

Amazingly, Zeta derives a majority of its current $10-$11 million revenue from a single client Sodexo and because of that Bhavin believes that this has the potential to scale to hundreds of millions of dollars in revenue over the next decade, tapping into the $300 billion markets for banking software globally.

Zeta tech works on the B2B2C model and acts as a technology service provider where it offers its tech-based products to banks and fintech businesses. They charged the banks based on the number of transactions or the number of customers. It also has a revenue-sharing model for fintech startups.

Startup’s business model is to convince big banks to outsource tech infra capabilities to it, enabling the lenders to focus on backend compliance and services. Its clients include banks in Asia and South America. The startup also has a cloud-native API-first banking stack for easy integrations. The company has now launched an omnichannel API stack for financial institutions, which will enable it to build specialized backend rails for neo-banking, consumer loans, and fraud analytics.

Product offerings from the start

Initially, they began by offering a range of employee benefit services including a cloud-based smart benefits suite called Zeta Tax Benefits to allow employees to digitize all kinds of tax-saving reimbursements and its digital cafeteria solution, Zeta Express.

In 2019, they merged this solution with the employee benefits business of Sodexo Benefits and Rewards India (BRS India).

In 2020, Zeta introduced its ACS (access control server) solution, Cipher, to provide a second-factor authentication service. It aims to help banks and financial institutions protect their users from security threats by safeguarding the OTP pages used during online transactions.


Zeta is the latest unicorn after its Series C round raising $250 million from SoftBank Vision Fund 2. Sodexo was the minority investor in the round. After this round, it is valued at $1.4 billion. Zeta suite became the 14th company this year to cross the $1 billion valuations.

Zeta was initially bootstrapped. Its first external funding was from Sodexo in 2019 amounting to $60 million. And, it was valued at $300 million back then. To date, the founders and employees own 90 percent of the company.  Zeta’s ongoing contracts have an annual run rate of $250-300 million in their lifetime, further leading to increased valuation by the end of this year.


Zeta’s product clients include RBL Bank, Sodexo, HDFC Bank IDFC First Bank, and Kotak Mahindra Bank ranging to around 14000 corporates and over 2 million users. At present, it serves 10 Banks and 25 Fintechs, across 8 countries. They currently have 500 employees and claim to be recording 1 Mn transactions per day.

Zeta is expanding its operations with contracts signed up by seven banks and may onboard eleven more for Tachyon. Around 20 Fintechs have been on-boarded for. Zeta aims to launch corporate gifting soon, under its employee benefits product which is already live with Sodexo. It has over 8,000-10,000 companies on board, with nearly 1.5-2 million employees using it.

Zeta has its operations in Vietnam, The Philippines, Brazil, and Italy, and will live in Spain, the UK & North America. The bulk of the revenues are drawn from the Electron platform, and contracted revenue is from Tachyon. Electron benefits have reached break-even, and are growing beyond $20 million in annual revenues. Tachyon and Fusion will achieve break-even by 2023.

With the growth of digital banking, innovation in financial services and the rising bar of quality consumer experience, banking software across the world needs an upgrade to cater to the digital customer. Zeta, with its full-stack tech solution and experienced management team, is well placed to facilitate this journey for banks and financial institutions.

Future plans

Zeta targets the world’s top 300 banks as potential clients and wants the US to account for 60% of its revenue in five years. The company plans to double its headcount in the next 12 months from about 800 currently.

The proceeds will be used to grow Zeta’s presence in the United States, Europe, and India. 70% of the capital raised is for business development and the residual for onboarding new clients. The spend will include scaling its operations, team, and platform to meet the demands of its expanding customer base. The focus will be to build a credit card processing stack.

Zeta’s near-term focus will be on fresh hires and completing product upgrades. It may look at a public listing eventually.

Urban Company



We manifest the entrepreneurial and startup ecosystem for enthusiastic entrepreneurs by helping them build their entrepreneurial skills and encouraging them in job creation rather than finding ones. These episodes aim to provide much-needed guidance & motivation among the youth and bridge the knowledge gap.

Leave a Reply

Your email address will not be published. Required fields are marked *