Bengaluru-based shopping loans marketplace ZestMoney has raised $20 million (about Rs 140 crore at current exchange rates) in its Series B funding round led by venture capital firm Quona Capital.
The company will use the fresh capital for its expansion plans and to finance its equated monthly instalments (EMI) in India. Besides this, it will invest in technology and data science to expand its acceptance online and in-stores as well as to build its product capabilities. The firm will also spend on strengthening its collaborations with retailers, banks and non-banking finance companies.
“Digital affordability solutions are witnessing unprecedented growth in India, and this funding will help us in making EMI financing a reality for a billion Indians by accelerating our efforts to make ZestMoney ubiquitous,” Lizzie Chapman, co-founder and chief executive at the firm, said.
Founded in 2015, ZestMoney allows online shoppers to open accounts instantly with banks. Users can then avail of EMIs to make purchases without having to use a credit card. The startup gathers data from various sources, including Credit Information Bureau. Customers who have not taken loans in the past can get a ZestMoney-enabled EMI.
ZestMoney and Xiaomi co-launched Mi Finance last year, enabling Mi customers in India to purchase Xiaomi products via a cardless EMI. The company also works with many other firms including e-commerce entities such as Amazon, Flipkart, Zefo as well as ed-tech firm UpGrad.
The startup, owned by Camden Town Technologies Pvt. Ltd, was founded by Chapman, a former Goldman Sachs executive; Priya Sharma, a former Merrill Lynch associate; and software engineer Ashish Anantharaman. Prior to founding ZestMoney, the three founders were with Wonga.com, a UK-based loan company.
Most recently, it raised an undisclosed amount of funding from venture debt firm Alteria Capital. Including the new round, ZestMoney has raised $42 million till date. Its other investors include Naspers Fintech and Xiaomi.
“ZestMoney and Quona’s partnership is very symbiotic given the shared values of addressing big challenges in emerging markets through delivering financial accessibility to vastly underserved consumers,” Ganesh Rengaswamy, co-founder and managing partner at Quona Capital.
Quona Capital focuses on fintech investments in emerging markets, including India. Its portfolio in the country includes IndiaMart, CreditMantri, NeoGrowth, SME Corner and Fisdom. Quona has a strategic partnership with global impact investor Accion International.
Reinventure is backed by Australian banking giant Westpac Banking Corp. With its third fund, Reinventure has stepped outside the country to target potential investments in Asia and expand its investment horizon to emerging fintech opportunities such as cryptocurrencies and open blockchain.