Payments firm ZestMoney raises $50 million to test out insurance business

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Payments firm ZestMoney raises $50 million to test out insurance business
ZestMoney
  • The Series C round was raised $50 million from Australia-based Zip Co that works in the same space.
  • Zip Co will acquire a minor stake and a board seat in Zestmoney post this investment.
  • The Indian startup claims to have a customer base of 11 million, of which 70% are from Tier II and III cities and are first time credit seekers.
Payments company Zestmoney, which allows customers to ‘buy now and pay later’ (BNPL), has raised $50 million from Australia-based Zip Co that works in the same space.

The six-year-old Indian startup will use this capital to further expand its product, deepen its transaction network, strengthen its balance sheet capacity and enter new business opportunities in insurance as well as savings.

ZestMoney also acquired a corporate agent insurance licence from the Insurance Regulatory and Development Authority of India (IRDAI) last month in order to get into the insurance business.

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Zip Co will acquire a minor stake and a board seat in Zestmoney post this investment. “The investment by Zip is a deep validation of our position as market leader in the Buy Now Pay Later category in India,” Lizzie Chapman, co-founder and chief executive (CEO) of ZestMoney said.

“While Buy Now, Pay Later is emerging as a preferred mode of payment globally, in India it also plays a crucial role in driving access to credit,” Larry Diamond, CEO of Zip Co, said.

The fundraise is a part of a larger Series C round, which will witness the participation of more existing investors. The fintech startup has not specified the names of the investors that are likely to invest in the round.

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ZestMoney has raised over $110 million to date from investors like Goldman Sachs, Quona Capital, Xiaomi, Prosus & Naspers, and Alteria Capital, among others. The company is a digital omnichannel BNPL player, which claims to have a merchant network of 10,000 online and 75,000 offline stores.

The company claims to have a customer base of 11 million, of which 70% are from Tier II and III cities and are first time credit seekers.

BNPL or Buy Now Pay Later is a short term micro credit model, which allows customers to purchase and delay the payment by 14-30 days. In some cases, customers also have an option to pay over several installments. LazyPay and Simpl are few companies working in this domain in India.

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