ZestMoney, which offers Buy Now Pay Later (BNPL) platform, on Wednesday said it has raised USD 50 million (about Rs 369 crore) from global BNPL provider Zip Co Ltd. This is part of a larger series C fundraise that will see participation from existing investors, a statement said. Zip will acquire a minority shareholding in the company and a board seat as part of the investment, it added.
ZestMoney plans to deploy the funds to expand the product suite, deepen the transaction network, strengthen its balance sheet capacity and launch new business lines in insurance and savings, the statement said. The company has raised USD 120 million till date from investors including Ribbit, Goldman Sachs, Quona Capital and Xiaomi. Zip – which was founded in Australia in 2013 – has a presence in 12 markets across five continents, serving more than 7.3 million customers and over 51,000 merchants.
Founded by Lizzie Chapman, Priya Sharma and Ashish Anantharaman in 2015, ZestMoney allows customers to pay for products over time. Increasing smartphone penetration, cheapest data plans in the world and boom in online shopping has propelled the demand for BNPL offerings in the country. ZestMoney offers the entire spectrum of BNPL offering from 30 days to 24 months and ticket sizes ranging from Rs 50 to Rs 5 lakh. The digital omnichannel BNPL player allows customers to transact at over 10,000 online sites and 75,000 physical stores across the country. It has 11 million registered users.
Smartphones, large appliances, fashion, travel, home decor, ed-tech are the largest categories on the platform. Electric bikes, ayurveda products, and personal care are popular among customers using the pay later option. ZestMoney partners with 25 banks and NBFCs to power BNPL transactions for consumers across the country. We are thrilled to have Zip come onboard for the next phase in our journey of powering affordability in the lives of Indian consumers. This is a deep validation of our position as market leader in the Buy Now Pay Later category in India,” ZestMoney CEO and co-founder Lizzie Chapman said.
The shift towards pay later solutions is a global phenomenon and represents young digital consumers looking for transparency, honesty and no hidden charges in financial products, Chapman added. “We believe India will leapfrog traditional products like credit cards, along with many other emerging markets, going straight to digital payment solutions. Over the last year we have seen applications for BNPL go up by 5X on our platform. We continue to invest in deepening partnerships with our merchant network and hiring the best talent,” she said.
ZestMoney strongly believes that India will emerge as the largest BNPL market in the world over the next five years, she added. Larry Diamond, CEO of Zip Co, said while BNPL is emerging as a preferred mode of payment globally, in India it also plays a crucial role in driving access to credit. “With deep partnerships with online and offline merchants and lending partners, Zest Money is poised to accelerate growth as the market develops. We have been incredibly impressed with the founders and leadership team and look forward to the next stage of the ZestMoney journey, he added.
ZestMoney recently secured the Corporate Agent licence from Insurance Regulatory and Development Authority of India (IRDAI) allowing it to offer and enable insurance products to users on its platform.