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Australia's Zip enters Indian buy-now-pay-later space with ZestMoney deal

Australian buy-now-pay-later firm Zip Co Ltd said it would invest $50 million to acquire a minority interest in Indian peer, ZestMoney, as part of its plans to tap new growth markets and add investors

ZestMoney | Australia | Fintech


Representative image
Representative image

(Reuters) -Australian buy-now-pay-later (BNPL) firm Zip Co Ltd said on Wednesday it would invest $50 million to acquire a minority interest in Indian peer, ZestMoney, as part of its plans to tap new growth markets and add investors.

The investment comes at a time of increasing popularity of the BNPL sector, where customers pay in instalments without any interest for their online purchases, as the COVID-19 pandemic pushed young shoppers to look for easier access to credit.

Zip, Australia's second-biggest BNPL player, is expanding its footprint in the rapidly growing sector, acquiring in Europe and the Middle East over the past one year.

Its investment in Bengaluru, India-based marks its entry into a market with a massive young demographic, which is gravitating more towards cash-less payments and has a huge growth potential in the BNPL and e-commerce space.

"With deep partnerships with online and offline merchants and lending partners, is poised to accelerate growth as the market develops," Zip Chief Executive Officer Larry Diamond said.

Zip said it had negotiated terms to increase its shareholding in over time.

The BNPL space saw established players testing newer areas of business to power growth, with Australian BNPL giant Afterpay getting a $29 billion offer from Square Inc, and U.S. payments giant PayPal acquiring a Japanese firm for $2.7 billion.

(Reporting by Sameer Manekar in Bengaluru, Editing by Sherry Jacob-Phillips)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Wed, September 22 2021. 09:38 IST