Bangalore-based FinTech ZestMoney has raised $15 million in a Series B funding round led by Goldman Sachs and existing investors Naspers, Quona Capital, and Omidyar Network, reports detailed on Thursday (Dec. 19).
ZestMoney co-founder and chief executive Lizzie Chapman told reporters that the new investment is part of an extended Series B round announced in April, bringing its total amount raised to $63 million.
India is still largely cash-based and its adoption of credit cards is low — just 3 percent of the population uses an alternative to physical money. Few people have credit scores, which banks depend on when extending loans.
Because loan profit margins are thin, the door is open for banking alternatives to serve India’s 300-plus million households.
ZestMoney was founded in 2015 by Chapman, Priya Sharma and Ashish Anantharaman. The platform fills the banking void and gives people digital access to credit and loans. The app-based platform uses mobile technology and artificial intelligence (AI) to partner with over 3,000 merchants, up from roughly 800 in late April.
ZestMoney assesses data points aside from credit scores and uses AI to help India’s population create a credit-worthy profile. Flipkart, Amazon and Paytm are among the bank alternatives extending credit and financing options at point-of-sale.
The platform already has over 6 million users with access to credit lines of $140 to $3,000, many being interest-free. The startup also partners with just about every online payments processor — Razorpay, BillDesk, Cashfree, CCAvenue, and PayU. ZestMoney has also signed deals with Chinese smartphone maker Xiaomi and Pine Labs, which has launched over 300,000 point-of-sale (PoS) machines nationwide in India.
ZestMoney will use the latest investment funds to expand strategic relationships. Japan’s Credit Saison, affiliated with Mizuho Financial Group, has extended $100 million in digital lending.
“We look forward to leveraging our global experience and network for the continued growth of ZestMoney,” Philip Aldis, a managing director at Goldman Sachs, told reporters.
Goldman Sachs has backed several Indian startups, BlackBuck, home rental platform NextAway, news aggregator DailyHunt and online furniture store PepperFry.
Earlier this month, smartphone maker Xiaomi started a credit platform designed to attract young professionals and millennials in India.
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