ZestMoney, an artificial intelligence-driven financing platform, has raised over Rs 100 crore ($15 million) in an equity investment round led by American investment banking giant Goldman Sachs. The Bengaluru-based company’s existing investors, Naspers Fintech, Quona Capital and Flourish, also participated in the funding round.
The firm said the funding comes at a time of "exciting opportunities" in the Indian fintech space which continue to soar, on the back of ample availability of low-cost data and government-backed investments in mobile payments infrastructure. Consumer credit penetration in India is amongst the lowest in the region with less than 5 per cent of adults owning a credit card. ZestMoney estimates there are as many as 600 million people in the country who are creditworthy but are not offered loans by traditional financial institutions.
“India is one of the most exciting fintech markets in the world. We see this investment in one of the country’s leading consumer lending fintech companies as fostering much-needed access to affordable consumer credit to Indian households," said Philip Aldis, a managing director at Goldman Sachs. “We look forward to leveraging our global experience and network for the continued growth of ZestMoney.”
ZestMoney has built a digital and scalable technology platform that can provide credit to people who have limited access to credit cards or any other formal financing options because of insufficient credit history.
“The capital we’ve raised in this latest round will enable us to accelerate product development, grow our strategic partnerships and scale our platform further to help support the dreams and aspirations of an ever-increasing number of Indian households," said Lizzie Chapman, co-founder, and CEO of ZestMoney. Chapman, Priya Sharma, and Ashish Anantharaman co-founded ZestMoney in 2015
The latest Reserve Bank of India data shows less than 54 million credit cards are currently in issuance in India, compared with more than 850 million debit cards. The company said that young online shoppers in India do not want to use credit cards but are increasingly keen to avail of "equal monthly instalment" (EMI) plans to help improve affordability. ZestMoney is a leading provider of these EMI plans on major e-commerce, travel and education platforms. ZestMoney expects to cross an annual run rate of over $1 billion in disbursal run rate in less than 18 months.
The ZestMoney platform uses an AI-based machine learning decision engine to enable instant approval of small-ticket loans and disburse the loan automatically without any manual human interference. It now has more than six million registered customers in India and a net promoter score of over 75. The company said consumers can use ZestMoney to pay for purchases of any amount up to $3,000 at over 3,000 merchants, many offering interest-free financing options. In recent months, brands including Flipkart, MakeMyTrip and Paytm have integrated with ZestMoney as a prominent payment option at checkout.