ZestMoney, a Bangalore-based buy-now, pay-later platform, announced on Wednesday that it has raised $50 million in a new funding round led by Australia’s Zip, as the Indian startup tries to capitalize on a trend that has shown early signs of popularity in numerous worldwide markets.
As part of the new Series C financing round, the eight-year-old Australian firm, which has a presence in 12 markets across five continents, is purchasing a minority investment in ZestMoney, according to the two.
The fresh financing round hasn’t closed yet, according to ZestMoney, because current investors will be involved. Goldman Sachs, Quona Capital, PayU, and Xiaomi are among the early supporters of the business, which has raised over $110 million to date.
In India, where just a small percentage of the population owns a credit card, the buy now, pay later business is still in its infancy. However, in a market dominated by traditional powerhouse Bajaj Finance, a few startups such as ZestMoney, Capital Float, and LazyPay are beginning to gain popularity.
Due to India’s low credit card penetration, only a small percentage of the population possesses a standard credit score, which banks use to determine a person’s creditworthiness before giving a loan. Furthermore, tiny loans do not yield high profits for banks, so they have less motivation to make such checks. ZestMoney claims to evaluate other data points and apply AI to assist these individuals in building a credit profile and becoming credit-worthy.
The firm, which claims to have over 11 million members and 25 banks and non-banking financial partners, collaborates with significant retailers including Amazon, Flipkart, Google Pay, Apple, and Xiaomi to provide clients with BNPL services. According to ZestMoney, it has a presence in over 75,000 physical establishments and over 10,000 internet sites. The startup’s product spans in price from 50 Indian rupees (68 cents) to $6,777, with a repayment time ranging from a month to two years.
“This is a strong endorsement of our position as India’s market leader in the Buy Now Pay Later category. In a statement, Lizzie Chapman, co-founder and CEO of ZestMoney, stated, “The transition to Pay Later solutions is a global phenomenon that symbolizes young digital consumers wanting for openness, honesty, and no hidden charges in financial goods.”