ZestMoney, a Bangalore-based buy now, pay later platform, said on Wednesday it has raised $50 million in a new financing round from Australia’s Zip as the Indian firm looks to double down on a trend that has shown early signs of traction in several global markets.
The eight-year-old Australian firm, which has a presence in 12 markets across five continents, is acquiring a minority stake in ZestMoney as part of the new Series C financing round, the two said.
ZestMoney said in a statement the new financing round hasn’t closed as existing investors will be participating in it as well. The startup, which has raised over $110 million to date, counts Goldman Sachs, Quona Capital, PayU and Xiaomi among its early backers.
The buy now, pay later market remains at a nascent stage in India, where only a fraction of the population has a credit card. But a handful of startups including ZestMoney, Capital Float and LazyPay are beginning to show traction in a market largely dominated by traditional giant Bajaj Finance.
The low penetration of credit cards in India has meant that very few people in the nation have a traditional credit score that banks heavily rely on to establish one’s creditworthiness before issuing them a loan. Moreover, small loans don’t generate lucrative returns for banks, giving them less incentive to write such cheques.
New research from The Strawhecker Group analyzes key trends and consumer attitudes.
Download a free infographic covering several findings from the full report.
Consumers have increasingly adopted Buy Now, Pay Later (BNPL) services for multiple reasons; a desire for financial flexibility, a way to avoid incurring credit card debt, or to purchase items outside of their budgets. However, despite its popularity, consumer debt and missed payments have led to calls for additional research and regulation. Read the press release.
To take a closer look, The Strawhecker Group (TSG) conducted a survey of over 1,500 U.S. consumers in early 2021 with the goal of understanding domestic attitudes and perspectives on the use of BNPL services. The complete findings, a selection of BNPL provider profiles, and market landscape details can be found in the firm’s new report Buy Now, Pay Later: An Analysis of Key Trends and Consumer Attitudes.
Highlights of this extensive 81-page report include:
- Buy Now, Pay Later Background
- Key Players in the Buy Now, Pay Later Space
- Buy Now, Pay Later Consumer Survey
- Concluding Thoughts: The Future of Buy Now, Pay Later