Merger and Acquisition

DMI Group Acquires ZestMoney in a Strategic Deal Amidst Distress

• ByStartupStory     |    January 18, 2024

DMI Group, a prominent pan-India financial services platform, has successfully acquired ZestMoney, the beleaguered ‘buy now pay later’ (BNPL) startup. The acquisition, made through DMI Finance, comes after ZestMoney faced challenges in attempting to revive its business under new management and amidst regulatory uncertainties.

The NBFC arm of DMI, DMI Finance, is set to become a preferred lender on the ZestMoney platform, gaining exclusive rights to the use of all ZestMoney brands. While the exact financial details of the transaction remain undisclosed, the move is expected to reshape the landscape of digital finance and checkout financing in India.

Shivashish Chatterjee, co-founder and joint managing director of DMI, expressed enthusiasm about the acquisition, highlighting ZestMoney’s pioneering role in providing checkout finance in India. “We have been partnered with ZestMoney for over 8 years in various capacities. We firmly believe that this acquisition will be an important step in our journey to provide digital financial inclusion at scale across India,” said Chatterjee.

ZestMoney, founded in 2015, introduced a fully automated digital customer onboarding and servicing system, allowing users to apply for and receive digital credit instantly at the point of sale. With a robust network of over 80,000 merchants, including major players like Amazon, Flipkart, and Myntra, ZestMoney has been a significant player in the BNPL space.

Mandar Satpute, Chief Operating Officer of Zest, expressed optimism about the future with DMI. “DMI has been at the forefront of digital lending in India. They bring strong capital support and deep expertise. DMI has been an early supporter of ZestMoney, and we are very excited to take our partnership to a whole new level.”

The acquisition is poised to provide DMI with an expanded customer base, fortified balance-sheet strength, and enhanced risk-management experience. DMI aims to leverage ZestMoney’s checkout financing platform to widen its engagement with customers and merchants across online and offline networks.

Founded by Lizzie Chapman, Priya Sharma, and Ashish Anantharaman, ZestMoney faced challenges in 2023, including the collapse of a proposed acquisition by fintech giant PhonePe. Despite reaching a valuation of $470 million at its peak and having a registered user base of 17 million, the company encountered difficulties amid changing regulations and funding challenges.

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