ZestMoney, a Bangalore-based buy now, later payments platform, said on Wednesday it had raised $ 50 million in a new round of funding from Australian Zip as the Indian company seeks to double down on a trend that has shown early signs of traction in several markets.
The eight-year-old Australian company, which has a presence in 12 markets across five continents, is acquiring a minority stake in ZestMoney as part of the new Series C funding round, the two said.
ZestMoney said in a statement that the new funding round is not over because existing investors will also participate. The startup, which has raised more than $ 110 million to date, counts Goldman Sachs, Quona Capital, PayU and Xiaomi among its first backers.
The market for buy it now and pay on it is still in its infancy in India, where only a fraction of the population has a credit card. But a handful of startups, including ZestMoney, Capital Float and LazyPay, are starting to show their way in a market largely dominated by traditional giant Bajaj Finance.
The low penetration of credit cards in India means that very few people in the country have a traditional credit rating that banks rely heavily on to establish their creditworthiness before granting them a loan. In addition, small loans do not generate lucrative returns for banks, making them less likely to write such checks.
ZestMoney says it is evaluating other data points and using AI to help these people build a profile and become creditworthy.
The startup, which says it has amassed more than 11 million users and has 25 banking and non-banking financial partners, is working with major merchants like Amazon, Flipkart, Google Pay, Apple and Xiaomi to bring its BNPL services to customers. ZestMoney is present in more than 75,000 physical stores and more than 10,000 online sites, he said.
The startup’s offering starts from 50 Indian rupees (68 cents) to $ 6,777 and the payback period ranges from one month to two years.
“This is a profound validation of our position as the market leader in the Buy Now, Pay Later category in India. The shift to Pay Later solutions is a global phenomenon and represents young digital consumers seeking transparency, honesty and no hidden fees in financial products, ”said Lizzie Chapman, Co-Founder and CEO of ZestMoney, in a press release.
“We believe India will move beyond traditional products like credit cards, as well as many other emerging markets, to move directly to digital payment solutions. Over the past year, we have seen BNPL requests increase by 5 times on our platform. We continue to invest in deepening partnerships with our network of merchants and hiring the best talent. We are confident that India will become the largest BNPL market in the world within the next 5 years. “