Financial services company DMI Group has acquired beleaguered buy-now-pay-later (BNPL) startup ZestMoney in a fire sale.
The deal will give DMI the exclusive right to use all brands of ZestMoney, with its non-banking finance company (NBFC) arm DMI Finance becoming the preferred lender on Zest’s platform, it said in a statement on Wednesday.
The development follows ZestMoney informing its employees last month about its plans to shut down by the end of December.
ET reported on December 29 that Zest’s lending partners DMI Finance and Aditya Birla Finance were looking to buy the fintech lending startup in a fire sale.
“We are always looking for best-in-class solutions to enhance both the engagement with – and the experience of – our customer and merchant base. We have been partnered with ZestMoney for over 8 years in various capacities. We firmly believe that this acquisition will be an important step in our journey to provide digital financial inclusion at scale across India,” said Shivashish Chatterjee, co-founder and joint managing director of DMI.
DMI said it will be adding ZestMoney’s checkout financing platform to its product suite. The financial services group will also add its customer base, balance sheet strength and significant risk-management experience to drive growth across Zest’s online and offline merchant network.
DMI has raised over $1.5 billion in investment capital from global institutional investors, strategic family offices and international banks.
“DMI has been at the forefront of digital lending in India. They bring strong capital support and deep expertise. DMI has been an early supporter of ZestMoney and we are very excited to take our partnership to a whole new level,” said Mandar Satpute, chief operating officer of ZestMoney.
ZestMoney currently has an outstanding loan book of around Rs 400 crore, which it has sourced for its lending partners.
Further for DMI and Zest’s other lending partners, it is important to collect the outstanding dues from the BNPL platform’s customers.
In 2021, during the heydays of the BNPL boom, ZestMoney had raised $50 million from Australian BNPL startup Zip at a valuation of $340 million.
However, the startup’s fortunes soured after negotiations for the proposed acquisition of the company by Walmart-owned PhonePe fell through, last year, reportedly due to concerns raised around the asset quality of loans sourced by Zest.
Source: Economic Times