Exclusive: ZestMoney in talks to raise $80 Mn from existing and new backers

The buy-now-pay-later concept has been picking up and companies offering these services have been receiving interest from growth-stage investors. After KreditBee, ZestMoney is now in talks to raise an $80-100 million round from existing and new backers, said three people aware of the details.

“Existing investors Prosus and Ribbit are doubling down their stake in ZestMoney,” said one of the people cited above requesting anonymity. “New investors are also likely to join the round which could go up to $100 million.”

The new round for ZestMoney has come after more than 16 months. It last raised $15 million in an extended Series B round in December 2019.

“The talks are beyond the preliminary stage and the company is finalising terms,” said the second person who also wished not to be named as discussions are private.

ZestMoney allows consumers to buy a product and make payments later across many categories. According to the company, high-end smartphones, edtech, fashion, large appliances, electric vehicles and travel were the most demanding categories in 2020. 

At present, ZestMoney is available across 15,000 online stores. The company had also partnered with UPI payments app Google Pay for instant credit.

According to sources, the deal is likely to go through in the coming month. Entrackr’s queries sent to ZestMoney and Prosus didn’t elicit any immediate response. We will update the story in case they do.

Over the past year, the concept of buy-now-and pay-later gathered ground as millennials flocked to avail short-term credit to buy lifestyle goods and services. While there are companies such as EarlySalary, LazyPay and Slice, KreditBee and ZestMoney have emerged as the category leaders.

Following the momentum in the segment and its key position KreditBee had raised $145 million in a Series C round from TPG-backed NewQuest Capital Partners and Motilal Oswal Private Equity. It offered exit to most of its early investors including the Chinese.

According to Fintrackr, ZestMoney had operating revenue of Rs 72.40 crore with a total expense of Rs 256.47 crore in FY20. The losses for the five-year-old company stood at Rs 181 crore in FY20.

Besides the companies mentioned above, ZestMoney competes with Jitendra Gupta’s Bullet Money among others. Entrackr had exclusively reported about Bullet Money in October last year.