Digital lending startup ZestMoney on Tuesday said it has raised $20 million (Rs 139.4 crore at current exchange rates) in its Series B round of funding led by venture capital firm Quona Capital as the Bengaluru-based consumer lending fintech startup seeks to address the growing demand of equated monthly instalments (EMI) financing in India.
Australian fintech investor, Reinventure, and existing investors Ribbit Capital, Omidyar Network and PayU also participated in the funding round, said ZestMoney in a statement.
The company will use the funding to upgrade technology and expand the acceptance of ZestMoney as a digital payment instrument both online and in-stores. The company will strengthen collaboration with its retailers, banks and non-banking financing companies (NBFCs) to develop a deeper and holistic ecosystem.
“Digital affordability solutions are witnessing unprecedented growth in India, and this funding will help us in making EMI financing a reality for a billion Indians by accelerating our efforts to make ZestMoney ubiquitous," said Lizzie Chapman, co-founder and chief executive of the startup.
ZestMoney, which is operated by Camden Town Technologies Pvt. Ltd, provides online shoppers with the facility to open accounts instantly with banks. Users can then avail of EMIs to make purchases without having to use a credit card. The startup gathers data from various sources, including Credit Information Bureau. Customers who have not taken loans in the past can get a ZestMoney-enabled EMI.
The startup was founded in 2015 by Chapman, a former Goldman Sachs executive; Priya Sharma (finance and operations chief), a former Merrill Lynch associate; and software engineer Ashish Anantharaman (tech chief). Prior to founding ZestMoney, the three founders were with Wonga.com, a UK-based loan company.
With the latest funding, ZestMoney has raised $42 million to date.
Earlier in January, the company raised funding from venture debt firm Alteria Capital as part of its extension of the stretched Series A funding round of $13.4 million (Rs 93.6 crore) led by Chinese handset maker Xiaomi in August 2018.
PayU had led the Series A round of $6.5 million in February 2017 for ZestMoney.
In August last year, it acquired platform PhotographAI for an undisclosed amount to strengthen its capabilities in visual artificial intelligence and optical character recognition.
Quona Capital focuses on fintech investments in emerging markets, including India. Its portfolio in India includes IndiaMart, CreditMantri, NeoGrowth and Fisdom.
Last month, Quona Capital led a funding round in SMEcorner, a microlending platform for small and medium businesses.
Quona Capital was earlier called the Frontier Investment Group, which was part of Accion International. It is now a separate entity although Accion is an anchor investor in Quona Capital's fund.
Reinventure, which was founded by Danny Gilligan and Simon Cant, is a corporate venture capital firm with a focus on fintech and allied areas. It has $150 million in committed funds with Australian financial services firm Westpac as its largest investor, according to its website.