Virtual Galaxy Infotech (VGIL), a software-as-a-service (SaaS) and enterprise software firm, is on a massive expansion plan to enter the global markets, especially Africa. The Nagpur-headquartered VGIPL’s products include e-banker, a robust core banking solution designed specifically for banks, co-operative societies, SACCOs, micro-finance institutions, fintechs and NBFCs. It also offers IBS-ERP, an ERP solution for small and mid-sized enterprises, and e-APMC, an e-governance software developed for Agricultural Produce Market Committees (APMCs) and government organisations.
Incorporated in 1997, VGIL has increased its presence exponentially since inception and transformed itself from a local start-up to a global IT solutions provider. It now spans 20 Indian states, showcasing its deep penetration into the domestic market. This extensive product range has allowed VGIPL to cater to diverse clients, from urban co-operative banks in metropolitan areas to rural financial institutions in remote regions.
Moreover, in recent months, it has entered international markets, too. On the global front, VGIL has made inroads into the African market, with a strong presence in countries, such as Tanzania, Malawi and Ethiopia. The company’s success in Africa is exemplified by its long-standing relationships, including an 11-year partnership with a prominent client in Tanzania. This expansion reflects VGIL’s ability to adapt its solutions to diverse market needs and regulatory environments.
“We offer our software solutions through both licences and subscriptions, with a focus on growing our revenue by acquiring new customers and expanding the user base within existing customer organisations,” elaborates Sachin Pande, co-founder, VGIL. “This dual approach enables us to maximise market penetration and foster long-term client relationships.”
With expanding boundaries, VGIL has increased its product portfolio too. Recently, it added V-Pay (a comprehensive enterprise digital payment solution), e-autopsy (an automation solution for the post-mortem departments of recognised hospitals) and VGST (which facilitates seamless GST compliance by offering tools for filing returns) to its product portfolio. Apart from this, it also offers solutions for Loan Origination Systems (LOS). This helps clients create and process loan applications, including KYC norms, disbursement of loans, recording and maintenance of requisite documentation in the said process and monitoring of loan cases.
“VGIL’s revenue model is increasingly shifting towards a SaaS approach, which now accounts for about 50 per cent of recurring revenue,” informs Tushar Agarwal, a Dubai-based pre-IPO investor. “This transition to SaaS aligns with industry trends and offers several advantages, including predictable revenue streams, scalability, and enhanced customer retention. Also, the company aims to expand its SaaS revenue to 80 per cent or higher in the coming years, reflecting its commitment to this business model. This SaaS-focussed strategy, combined with VGIL’s diverse product portfolio and expanding global presence, positions the company for sustained financial growth and improved profitability in the future.”
“We have built our go-to-market strategy on direct sales and collaborations with channel partners,” adds co-founder Avinash Shende. “In India, we handle direct sales through our in-house Business development team, while our channel partners and dedicated sales and business development teams manage sales in overseas markets.” As of 30 June 2024, VGIL has two channel partners – one in Tanzania and one in Israel. Further, it is signing agreements with seven prospective channel partners globally in other countries, including Ethiopia, Malawi, Liberia, Uganda, South Africa, Kenya, Seira Leone, Myanmar, Vietnam and Laos, to enhance its market reach and business growth.
Friends’ mission
First-generation entrepreneurs and classmates Shende and Pande, who started VGIL, both hold degrees in Computer Engineering and MBAs in IT from Nagpur University. “We started with nothing but a dream and a shared passion for technology,” says Pande. “From securing our first order from a co-operative bank in 1998 to becoming a trusted partner for over 150 banks and cooperative societies across India and Africa, our journey has been a testament to the VGIL founders’ entrepreneurial spirit and unwavering dedication”.
“Today, we have over 300 skilled professionals and are leaders in the information technology industry, driving digital transformation and empowering businesses with state-of-the-art technology solutions,” Shende adds.
According to Pande, “The decision to enter the IT industry was driven by a shared vision to revolutionise banking and financial services through technology. We wanted to create solutions that would empower businesses, especially in underserved markets, with state-of-the-art technology, thereby making a significant impact on these communities.”
In the last 30 years, VGIL has built a diverse clientele of over 150 entities, including banks, micro-finance institutions and NBFCs. Its flagship product, e-banker, is a robust core banking solution designed specifically for banks, societies and NBFCs. In addition, it offers IBS-ERP (a solution tailored for small and mid-sized enterprises) and e-APMC (an e-governance software developed for agricultural produce market committees and government organisations). Its V-Pay is a comprehensive enterprise digital payment solution. “Our success is not just about the products we’ve built,” concur Shende and Pande. “It’s about the lives we have touched and the industries we have transformed. Every challenge has only made us stronger and more innovative.”
Recently, VGIL announced that it has closed its pre-IPO funding round and raised Rs21.44 crore from marquee investors, among whom are participated in the pre-IPO funding are Devnanthan Govind Rajan (former RARE Enterprise MD), Jayaraman Vishwanathan (ex-director Electra Partners Asia Fund), Asit Oberoi (former COO, Yes Bank), Umesh Sahay and Abhishek Narbaria (co-founders, EFCI), Darshan Gangolli (former ED, Altico Capital, a real estate fund), Abhishek More (founder & CEO, Digikore Studios), Amit Mamgain (senior VP, equity sales, AMSEC) and M. Srinivas Rao (ex-DM, Bill and Melinda Gates Foundation, India).
Other prominent investors include India Emerging Infrastructure & B PE Group; Shashank Mishra (founder & CEO, Xolopak India) and Nova Capital Opportunities Funds. The company is in the process of filing its documents for its initial public offering and has appointed Smart Horizon Capital Advisors (formerly known as Shreni Capital Advisors) as the lead manager for the IPO. The company plans to raise close to Rs100 crore by offering around 6.66 million shares through the book-building issue.
For the year ended March 2024, VGIL achieved a total revenue of Rs61.46 crore and a net profit of Rs16.05 crore. Meanwhile, for the June 2024 quarter, the company reported a revenue of Rs32.45 crore and a net profit of Rs8.14 crore. “VGIPL’s competitive edge is not just about its products,” adds Avinash Gorakshakar, research head, Profitmart Securities. “It’s about innovation that permeates every aspect of the company. We believe that VGIL does not just offer products; it provides ecosystems of innovation. Its comprehensive suite seamlessly integrates various financial services, creating a synergy greater than the sum of its parts. This integration is not just a feature; it’s a revolution in how financial institutions can operate and serve their customers.”