Bengaluru-based digital lending startup ZestMoney has raised $13.4 million (Rs 93.6 crore) in an extended Series A funding led by handset maker Xiaomi.
Existing investors PayU, Ribbit Capital and Omidyar Network also participated in the round, the company said in a statement on Monday.
Naspers-owned online payments firm PayU had led the Series A round of $6.5 million in February 2017.
The latest funding takes the total amount that the startup, operated by Camdem Town Technologies Pvt. Ltd, has raised thus far to $22 million, the statement said.
The company plans to use the money to strengthen its technology and data science capabilities as well as expand use cases for the core ZestMoney Affordability Product to make it the digital consumer's preferred lifestyle financing solution, the statement said.
Lizzie Chapman, co-founder and chief executive at ZestMoney, said Xiaomi has successfully built digital credit products in China. "They have built one of the most loved brands in India and they have a passionately consumer-focused philosophy which deeply resonated with our values as a company," she said.
ZestMoney provides online shoppers the facility to open accounts instantly with banks providing loans. Users can then avail equated monthly instalments (EMI) to make purchases without having to use a credit card. The startup gathers data from various sources, including credit information bureaus, to help users decide. This means even customers who have not taken loans in the past can get a ZestMoney-enabled EMI.
ZestMoney and Xiaomi co-launched Mi Finance last year, enabling Mi customers in India to afford Xiaomi products via a cardless EMI, the company statement said.
The startup was founded by finance and tech professionals Chapman, a former Goldman Sachs executive; Priya Sharma (CFO and COO), a former Merrill Lynch associate; and software engineer Ashish Anantharaman (CTO). Prior to founding ZestMoney, the three co-founders were with Wonga.com, a UK-based loan company.
ZestMoney also works with e-commerce Amazon, Flipkart, Zefo as well as ed-tech firm UpGrad. This year the startup aims to expand its services into travel and healthcare sectors as well as create more credit products.
The company claims to receive three lakh applications per month. It recently acquired platform PhotographAI for an undisclosed amount to strengthen its capabilities in visual AI and optical character recognition.