ZestMoney, the $450 million Goldman Sachs-backed Indian fintech startup, has sold itself to financial services firm DMI Group, the two said late Wednesday, in a cheap sale that caps a turbulent 12 months for the new-age lender. Which used to be hot.
The two companies did not disclose terms of the deals, but one person familiar with the situation said the acquisition was largely a way for DMI to poach and retain talent and that every ZestMoney investor lost money.
The deal gives it the exclusive right to use all Zest brands and makes DMI Finance, the NBFC arm, the preferred lender on the Zest platform, DMI Group said in a statement. DMI also plans to provide its customers with a ZestMoney checkout financing platform. “DMI will also bring its client base, balance sheet strength and significant risk management expertise to drive growth across Zest’s online and offline business network,” DMI said in a statement.
News of the acquisition comes on the heels of ZestMoney — the buy-now-pay-later platform, whose ability to underwrite small-ticket loans to first-time online customers attracted many high-profile investors — announcing last month that it would shutter the startup.
The founders of ZestMoney left the startup in May last year after acquisition talks with fintech giant PhonePe did not conclude. The founding team handed the company over to three new leaders, who raised a few million dollars from existing investors and tried to find a new path for the company.
The Bengaluru-headquartered startup — which names PayU, Quona, Zip, Omidyar Network and Ribbit Capital among its backers — has employed around 150 people and raised more than $130 million in its eight-year journey.
“ZestMoney has been a leading exit financing provider in India. We are always looking for best-in-class solutions to enhance engagement with – and experience with – our customers and merchant base,” Shivashish Chatterjee, co-founder and joint managing director of DMI, said in a statement. Partnered with ZestMoney for over 8 years in various capacities. We firmly believe that this acquisition will be an important step in our journey to provide digital financial inclusion at scale across India.