India’s DMI Group snaps up BNPL fintech ZestMoney
Indian buy now, pay later (BNPL) start-up ZestMoney has been acquired by DMI Group in a fire sale.
ZestMoney acquired by India’s DMI Group
The news follows reports in December last year that ZestMoney was closing down after unsuccessful efforts to find a buyer or raise additional capital.
The deal will grant DMI Group access to all of Zest’s brand rights and will see DMI Finance – the group’s non-bank financial company (NBFC) with products including consumption, personal and business loans – assigned as the preferred lender to the Zest platform. The fintech’s checkout financing platform will also be added to the group’s product suite.
According to its latest statement, DMI expects the acquisition to “widen its engagement with current and potential customers” as it attempts to expand the fintech’s merchant network.
Shivashish Chatterjee, co-founder and joint managing director of DMI, says the takeover will “be an important step in our journey to provide digital financial inclusion at scale across India”.
Heyday to mayday
Although previously identified as a key player in India’s BNPL market and once valued at $450 million, the acquisition brings to an end a difficult year for Zest.
At the height of its success, the Bengaluru-based fintech’s consumer lending platform was viewed as a hot contender to traditional forms of lending with its provision of quick loans for the financially excluded and those with thin credit histories. It raised around $130 million since its 2015 inception from backers including Goldman Sachs, Quona Capital, Ribbit Capital, Omidyar Network and Reinventure, among others.
However, reports last year suggested the fintech was finding it difficult to raise new capital, and in April 2023, a proposed acquisition by Indian payments giant PhonePe fell though, with The Economic Times reporting that PhonePe decided to walk away from the deal after carrying out its due diligence checks, with sources suggesting concerns over ZestMoney’s business model and debt liability.
This failed acquisition set off a chain of events that resulted in the departure of all three of the fintech’s original founders – Lizzie Chapman, Ashish Anantharaman and Priya Sharma – last May. The new leaders of the bruised fintech scrambled to secure fresh funding, but the drive appeared too little too late as its imminent closure was reported in December.
Now, DMI Group, which operates a financial platform across India featuring digital finance, asset management and housing finance products, has stepped forward to pick up the pieces. The financial terms of the takeover have not been disclosed.
