After the first round of investment closed in April this year, Bangalore-based ZestMoney announced on December 19, 2019, that several investors agreed to fund its second round of capital expansion. In addition to Goldman Sachs, which is one of the US’ largest banks, existing investors such as Naspers Fintech, Quona Capital, and Omidyar Network invested $15 million in the four-year-old startup.
ZestMoney Facilitating Loan Access
The Indian financial technology (fintech) company, ZestMoney, provides loans to customers for their personal use and allows them to pay back the loans through the digital equated monthly installments (EMI) without using their credit cards. With the new round of Series B funding, the fintech company plans to extend its services to millions of Indians.
At present, the access to credit cards remains very low in India, and only a few customers are able to settle credit score. Many customers are denied loans by the banks on the account of a bad credit score record. In recent years, many Indian startups have attempted to address these problems.
ZestMoney focuses on providing loans to those customers who want to spend more on purchasing things online and these customers can reimburse the loans under the EMI. The customers can choose any EMI policy they want to pay back the loans. Currently, the fintech offers credit ranging from $140 to $3,000 to the customers for their online shopping and interest-free options if they choose to pay back the loan within a specified time.
ZestMoney plans to extend credit worth $1 billion in the following 18 months, which is likely to benefit 300 million users. According to Boston Consulting Group, “Digital lending in India is expected to be a $1 trillion opportunity in the next five years.”
The Current Operations of ZestMoney
ZestMoneynow has more than 6 million users operating with 3,000 partners, of which 800 were added during the first round of investment held in April 2019. These include Flipkart, Amazon, and Paytm. The startup is presently working with nearly every online financial payment service provider in India including Razorpay, BillDesk, Cashfree, CCAvenue, and PayU.
It had already started partnering with Xiaomi, a major Chinese smartphone manufacturer. It recently entered into a strategic partnership with a Japan-based financial services company, Credit Saison, which is affiliated with the Mizuho Financial Group to invest $100 million to expand its business into loan lending services in India.
With this Series B funding, Lizzie Chapman, the CEO of ZestMoney, stated that the company’s total capital value increased to $63 million. Philip Aldis, a Managing Director at Goldman Sachs, shared, “The firm’s investment in ZestMoney would enable more households in India to access credit. We look forward to leveraging our global experience and network for the continued growth of ZestMoney.”
Goldman Sachs, a key investor in the new round of investments has invested in a number of financial startups across the globe. Over the years, it has invested in other Indian startups including, logistics startup BlackBuck, home rental platform NestAway, news aggregator DailyHunt, and online furniture store PepperFry.
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