ZestMoney Acquired

A fully automated digital customer onboarding and servicing system, enabling customers to apply for and receive digital credit instantly at the point of sale.

Digital affordability solutions witnessing unprecedented growth in India, making EMI financing a reality for a billion Indians by accelerating efforts to make ZestMoney ubiquitous.

ZestMoney operates a B2B2C model where it partners with online merchants to offer consumer finance for online purchases, with a ticket size ranging from $75-$1500 (INR 5k-100k) and flexible tenure of up to 24 months.

Merchants who partner with ZestMoney see a significant increase in checkout conversions, increase in average transaction size as well as higher levels of customer loyalty and retention.

New customers download the Zest app and complete their own profile to instantly see their credit facility, with no branch visit or agent required to get started.

After onboarding, customers upload KYC documents and set up automatic EMI repayments directly from their bank account inside the app, keeping the ongoing relationship self-managed rather than agent-driven.

ZestMoney ran recurring cashback campaigns -- for example, up to INR 750 for uploading KYC and bank statements -- that pay out only after the customer's first on-time EMI repayment, an incentive structure designed to reward and reinforce good repayment behavior.

It has more than 80,000 merchants across India including Amazon, Flipkart, Myntra, MakeMyTrip, Nykaa, Samsung, Apple, Vivo, Croma, and Reliance Digital.

Their pioneering 'Cardless EMI' enables online merchants to offer a seamless checkout financing solution to their customers.

Funding used to further augment its risk engine and develop better in-house technology, and to expand its partner network and bring 'Pay Using ZestMoney EMI' to the majority of ecommerce websites and apps.

ZestMoney built in-house machine-learning models, refined via A/B testing, to evaluate new credit applications, segment users into predictive risk groups, and personalize each applicant's journey -- as described by the company's own Chief Data Officer, Natalia Lyarskaya.

ZestMoney's own site cites a registered user base of over 17 million with a 4.4 rating on the Play Store, an accumulated user and behavioral-data asset built over its lifetime.

Across its roughly eight-year life, ZestMoney raised over $130 million from investors including Goldman Sachs, PayU, Quona, Zip and Omidyar Network, reaching a peak valuation of $450 million before its 2024 sale to DMI Finance.

At the time of its 2024 sale, ZestMoney employed about 150 people; TechCrunch reported the DMI Finance deal was structured largely as a way to retain that talent rather than for the business itself.

ZestMoney generates revenue via Direct Selling Agency (DSA) fees collected from its lending partners (NBFCs) for services such as lead generation, KYC, customer care and branding.

More than 80,000 merchants across India including Amazon, Flipkart, Myntra, MakeMyTrip, Nykaa, Samsung, Apple, Vivo, Croma, and Reliance Digital.

ZestMoney and Xiaomi launched Mi Finance to enable purchase of Xiaomi products through card-less EMIs; Xiaomi also invested $13.4 million in the company's extended Series A round.

Direct selling agency fees (DSA) comprises the amount collected by ZestMoney from its lending partners (NBFCs) for the provision of services such as lead generation, KYC, customer care and branding.

The company charges a 'merchant commission' on a fixed rate on products and services purchased by the borrowers from the merchants.

Arranger fees from the merchants which stood at Rs 12.81 crore while technology usage fees and other related incomes aggregated to Rs 4.14 crore in FY20.

ZestMoney's total expenses rose 22% year-on-year to INR 662.2 crore in FY23, up from INR 543.8 crore in FY22, as losses continued to widen ahead of the company's 2024 sale to DMI Finance.

ZestMoney's largest single cost line is 'service deficiency charges' -- its term for costs tied to loan defaults/guarantees paid to lending partners -- which came to INR 175.2 crore in FY23 (26.4% of total expenses), down 25% from INR 233.4 crore in FY22.

Advertising and marketing costs surged 69% to INR 165 crore in FY23 from INR 97.8 crore in FY22, reflecting heavy spend on customer acquisition relative to revenue.

Employee costs -- salaries, provident fund, gratuity and other benefits -- rose 40% to INR 130.4 crore in FY23 from INR 93.3 crore in FY22.