DMI Group Acquires ZestMoney in Strategic Deal Amidst Distress

By siliconindia  |  Friday, 19 January 2024, 10:14 IST

DMI Group Acquires ZestMoney in Strategic Deal Amidst Distress
DMI Group, a prominent financial services platform operating across India, has successfully acquired ZestMoney, the distressed 'buy now pay later' (BNPL) startup. This acquisition, executed through DMI Finance, comes as ZestMoney encountered challenges in revitalizing its business under new management and amid regulatory uncertainties. The non-banking financial company (NBFC) arm of DMI, DMI Finance, is poised to become the preferred lender on the ZestMoney platform, gaining exclusive rights to utilize all ZestMoney brands. While the exact financial terms of the deal remain undisclosed, this move is anticipated to reshape the landscape of digital finance and checkout financing in India.
Shivashish Chatterjee, Co-Founder and joint managing director of DMI expressed excitement about the acquisition, emphasizing ZestMoney's pioneering role in offering checkout finance in India. Chatterjee stated, "We have been in partnership with ZestMoney for over 8 years in various capacities. We firmly believe that this acquisition will be a crucial step in our journey to provide digital financial inclusion at scale across India".
Founded in 2015, ZestMoney introduced a fully automated digital customer onboarding and servicing system, enabling users to apply for and receive digital credit instantly at the point of sale. With a robust network of over 80,000 merchants, including major players like Amazon, Flipkart, and Myntra, ZestMoney has been a significant player in the 'buy now pay later' (BNPL) space. Mandar Satpute, Chief Operating Officer of Zest, expressed optimism about the future with DMI, stating, "DMI has been at the forefront of digital lending in India. They bring strong capital support and deep expertise. DMI has been an early supporter of ZestMoney, and we are very excited to take our partnership to a whole new level".
The acquisition is set to provide DMI with an expanded customer base, strengthened balance sheet strength, and improved risk-management capabilities. DMI intends to leverage ZestMoney's checkout financing platform to broaden its engagement with customers and merchants across online and offline networks. Founded by Lizzie Chapman, Priya Sharma, and Ashish Anantharaman, ZestMoney faced challenges in 2023, including the collapse of a proposed acquisition by fintech giant PhonePe. Despite reaching a peak valuation of $470 million and boasting a registered user base of 17 million, the company encountered difficulties amid changing regulations and funding challenges.

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