DMI Group acquires BNPL startup ZestMoney

DMI Group on Wednesday announced the acquisition of buy now pay later platform, ZestMoney. DMI Finance, the NBFC arm of DMI, will be a preferred lender on the Zest platform from now onwards.

Details about the deal size haven't been disclosed but it’s certainly a distress sale.

The acquisition comes weeks after the formal shutdown of Zestmoney, which laid off its entire workforce by December.

Post the deal, DMI will have the exclusive right to all Zest brands. It’ll also enable the group to widen its engagement with the user base of ZestMoney and product suite, the firm said in a release.

Founded in 2008, DMI is a financial services conglomerate with core businesses in digital, housing and asset finances. It claims to have raised over $1.5 billion of investment from blue-chip investors including banks.

The group runs DMI Finance which is a pure-play digital lender with products including consumption, personal and MSME loans. In April 2023, DMI Finance announced the closure of a $400 million equity round led by Mitsubishi UFJ Financial Group, Inc.

ZestMoney raised around $125 million in its lifetime which also included a significant debt component. It closed its Series C round worth $58 million in September 2021 but stringent regulation on BNPL startups coupled with a challenging funding environment led ZestMoney to go for complete shutdown.

That said, ZestMoney is the second company that has been acquired by a larger group after the exit of all co-founders. Last year, GoMechanic was similarly acquired by LifeLong Group while all three co-founders left the firm amidst severe financial irregularities.