ZestMoney, the $450 million Goldman Sachs-backed Indian fintech startup, has sold itself to financial services firm DMI Group, both said late Wednesday, in a fire that caps a tumultuous 12 months for its once-hot lender new era.
The two companies did not disclose terms of the deals, but a person familiar with the situation said the acquisition is largely a way for DMI to poach and retain talent and that every investor in ZestMoney lost money.
In a statement, the DMI Group said the deal gives it the exclusive right to use all Zest brands and makes its NBFC arm DMI Finance a preferred lender on the Zest platform. DMI also plans to offer its customers ZestMoney’s treasury funding platform. “DMI will also bring its customer base, balance sheet strength and significant risk management experience to drive growth in Zest’s online and offline merchant network,” DMI said in a statement.
News of the acquisition follows ZestMoney — a buy now, pay later platform whose ability to make small-ticket loans to first-time online customers attracted several high-profile investors — announcing last month that it would shut down the startup.
ZestMoney’s founders left the startup in May last year after takeover talks with fintech giant PhonePe fell through. The founding team handed the company over to three new leaders, who raised a few million dollars from existing investors and tried to find a new path for the company.
The Bengaluru-based startup — which counts PayU, Quona, Zip, Omidyar Network and Ribbit Capital among its backers — employed about 150 people and had raised over $130 million in its eight-year journey.
“ZestMoney has been a pioneer provider of fund financing in India. We are always looking for best-in-class solutions to improve both the engagement with – and the experience of – our customer and merchant base,” Shivashish Chatterjee, co-founder and joint MD of DMI, said in a statement. “We have worked with ZestMoney for 8+ years in various capacities. We strongly believe that this acquisition will be an important step in our journey to deliver digital financial inclusion at scale across India.”
