Australia’s Zip Buys Minority Stake in India’s BNPL Startup ZestMoney

Buy now pay later (BNPL) startup Zip, formerly Quadpay, purchased a $50 million minority stake in the Indian BNPL newcomer ZestMoney as part of a continuing Series C funding round, according to a press release on Wednesday (Sept. 21).

Launched in 2015 in Bangalore, ZestMoney counts Goldman Sachs, Quona Capital, PayU and Xiaomi among its early backers. The Series C will close following participation from existing investors.

See also: Zip, Quadpay To Merge Into A Single BNPL Brand

Lizzie Chapman, CEO and co-founder of ZestMoney, said that Zip’s participation is a “deep validation” of ZestMoney’s position as a BNPL market leader in India.

“We believe India will leapfrog traditional products like credit cards, like many other emerging markets, going straight to digital payment solutions,” Chapman said. “We strongly believe India will emerge as the largest BNPL market in the world over the next 5 years.”

Chapman co-founded the company with Priya Sharma, who serves as chief operating officer, and Ashish Anantharaman, chief technology officer. ZestMoney’s platform uses mobile technology, digital banking and artificial intelligence (AI) to make affordable digital finance accessible.

Read more: BNPL Adoption Accelerates, Driven By Benefits

Few people in the country have credit cards, and even fewer have a traditional credit score that most lenders use to establish creditworthiness for a loan. The BNPL market is in its early stages in the country but is making headway by startups like ZestMoney, Capital Float and LazyPay.

ZestMoney helps people develop a credit profile by combining AI and data points to evaluate a person’s ability to repay. The startup has 11 million users and 25 banking and non-bank financial partners and works with big marketplace brands like Amazon, Flipkart, Apple and others.

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Larry Diamond, Zip co-founder and CEO, said that BNPL is playing a “crucial role in driving access to credit” in India. ZestMoney has numerous partnerships and is “poised to accelerate growth” as the BNPL market further develops in the country.

Part of Zip’s global investment strategy is to pinpoint high-growth startups operating in valuable markets “with the potential to generate strong stand-alone cashflows” that can be further complemented by Zip’s technology and experience.