ZestMoney, the Indian fintech startup once valued at $450 million and backed by Goldman Sachs, has been acquired by financial services firm DMI Group in a fire sale. This acquisition marks the end of a tumultuous period for the once-promising new age lender.
Key Takeaway
ZestMoney, once valued at $450 million and backed by Goldman Sachs, has been acquired by DMI Group. The acquisition is expected to enable DMI to integrate ZestMoney’s offerings and expand its presence in the Indian fintech market.
Exclusive Acquisition Details
The terms of the acquisition were not disclosed, but it is believed that DMI Group’s primary motivation was to acquire and retain talent. Unfortunately, every investor in ZestMoney incurred losses as a result of this deal.
DMI Group’s Plans
DMI Group has announced that the acquisition grants it exclusive rights to the use of all Zest brands. Additionally, it will integrate the NBFC arm DMI Finance as a preferred lender on the Zest platform. DMI also intends to offer its customers access to ZestMoney’s checkout financing platform. The company aims to leverage its customer base, balance-sheet strength, and risk-management experience to drive growth across Zest’s online and offline merchant network.
Background and Recent Developments
ZestMoney, known for its buy now, pay later platform and its ability to underwrite small ticket loans to first-time internet customers, had attracted significant investments from high-profile backers. However, the startup announced last month that it would be shutting down. This decision came after the founders of ZestMoney resigned in May last year when acquisition talks with fintech giant PhonePe fell through. The startup was then handed over to a new leadership team, which attempted to chart a new path for the company by raising additional funds from existing investors.
Implications of the Acquisition
Shivashish Chatterjee, co-founder and joint MD of DMI, expressed optimism about the acquisition, emphasizing that it will play a crucial role in the company’s mission to provide digital financial inclusion at scale across India. He highlighted ZestMoney’s pioneering role in checkout finance in India and the potential for enhanced customer and merchant engagement.
