ZestMoney Raises $50 Million from Zip - BNPL Expansion

ZestMoney Secures $50 Million Funding from Zip

ZestMoney, a buy now, pay later (BNPL) platform headquartered in Bangalore, announced on Wednesday a new financing round of $50 million. The investment comes from Australia’s Zip, as the Indian company aims to expand its operations.

Zip, an eight-year-old Australian firm operating in 12 markets across five continents, is acquiring a minority stake in ZestMoney as part of this Series C funding round.

Details of the Financing

According to a statement released by ZestMoney, the financing round is still ongoing, with participation expected from existing investors. To date, the startup has raised over $110 million, with early backing from firms including Goldman Sachs, Quona Capital, PayU, and Xiaomi.

The BNPL market in India is still developing, as credit card penetration remains low among the population. However, companies like ZestMoney, Capital Float, and LazyPay are gaining momentum in a market traditionally led by Bajaj Finance.

Addressing Credit Access in India

The limited availability of credit cards in India results in a significant portion of the population lacking a traditional credit score. This poses a challenge for individuals seeking loans, as banks heavily rely on credit scores to assess creditworthiness.

Furthermore, the profitability of small loans is often insufficient for banks, reducing their incentive to approve them.

ZestMoney utilizes alternative data points and artificial intelligence (AI) to evaluate individuals and establish their creditworthiness.

ZestMoney’s Reach and Offerings

The company has accumulated over 11 million users and collaborates with 25 banking and non-banking financial partners. ZestMoney integrates its BNPL services with major merchants like Amazon, Flipkart, Google Pay, Apple, and Xiaomi.

Its services are available across more than 75,000 physical stores and over 10,000 online platforms.

ZestMoney’s financing options range from 50 Indian rupees (approximately 68 cents) to $6,777, with repayment periods spanning from one month to two years.

Industry Outlook and Future Growth

“This investment is a strong endorsement of our leadership in the Indian BNPL sector,” stated Lizzie Chapman, co-founder and CEO of ZestMoney. “The increasing preference for pay later solutions is a global trend, driven by consumers seeking transparency and straightforward financial products.”

Chapman believes that India, along with other emerging markets, will bypass traditional credit card adoption and move directly to digital payment solutions. Applications for BNPL services on their platform have increased fivefold in the past year. The company plans to continue investing in merchant partnerships and talent acquisition.

ZestMoney anticipates that India will become the world’s largest BNPL market within the next five years.