Buy Now, Pay Later platform ZestMoney raises $50 million in Series C funding from Zip Co

09:10 AM Sep 22, 2021 | FPJ Web Desk

ZestMoney, Buy Now, Pay Later (BNPL) platform, today announced that it has raised $50 million from BNPL provider Zip Co Limited. This is part of a larger Series C fundraise which will see participation from existing investors.

Zip will acquire a minority shareholding in the company and a board seat as part of the investment. Founded in Australia in 2013, Zip has a presence in 12 markets across five continents, serving more than 7.3m customers and over 51K merchants.


The company 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.


Founded by Lizzie Chapman, Priya Sharma and Ashish Anantharaman in 2015, ZestMoney allows customers to pay for products over time but enjoy them now. Increasing smartphone penetration, cheapest data plans in the world and boom in online shopping has propelled the demand for Pay Later offerings in the country.

India is also one of the most financially underpenetrated markets in the world. Credit cards have only 3 percent penetration, have hidden charges and are not accessible to everyone. Around 500 million people use digital payments and need a convenient and transparent payment option.

The company uses Artificial Intelligence and Machine Learning data models to approve new to credit customers, giving it an distinctive edge in the market.

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. It is a completely digital omnichannel BNPL player in the country, allowing customers to transact at 10,000+ online sites and 75,000 physical stores across the country, it said in a press release.

Lizzie Chapman, CEO and Co-founder, ZestMoney 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. 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. We strongly believe India will emerge as the largest BNPL market in the world over the next 5 years”.

Larry Diamond, CEO of Zip Co, “With more people using digital payments and online shopping, ZestMoney can positively impact hundreds of millions of lives in the coming years. With deep partnerships with online and offline merchants and lending partners, Zest Money is poised to accelerate growth as the market develops.”

The company uses AI and machine learning across various stages of onboarding customers including risk assessment, fraud detection, affordability, assessment and KYC compliance. All of this has been built and developed in-house. ZestMoney also uses an alternate data model for underwriting, with a bunch of data points like mobile technology, social data, transactions data from merchants and clickstream data apart from standard data from banks. This gives it a distinctive edge in approving new to credit customers, it said.

Being an end to end digital player the company can service demand from remotest parts of the country. The company has 70 percent of their customers in Tier II and III markets, majority of whom are accessing formal credit for the first time in their lives. There are several zero-cost pay later offers that customers can choose from.

Smartphones, large appliances, fashion, travel, home decor, Edtech are the largest categories on the platform. Electric bikes, Ayurveda Products, and personal care are popular among customers using the Pay Later option.

The company 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.

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