Fintech Startup ZestMoney, Set to Close, Attracts Acquisition Interest from NBFCs

ZestMoney, a Bengaluru-based fintech firm, recently announced its impending closure by the year-end, signaling an acquisition move by notable non-banking financial companies (NBFCs). According to a report by Economic Times, Aditya Birla Finance and DMI Finance are vying to acquire ZestMoney, considering the potential to leverage its technology platform.

Both NBFCs, former partners of ZestMoney, are evaluating the startup’s loan book in a bid to acquire its technology infrastructure and take over the existing loan portfolio. A source familiar with the situation revealed, “The lenders are eyeing ZestMoney’s technology platform and the loans they had facilitated for partners.”

The startup’s loan book reportedly stands at approximately ₹400 crore, making it an attractive proposition for potential acquisition.

Two specific features have spurred the interest of Aditya Birla Finance and DMI Finance. ZestMoney boasts a substantial customer base with in-depth credit underwriting, presenting an appealing opportunity. Additionally, its technology platform, designed post the Reserve Bank of India’s 2022 digital lending guidelines, has captured attention.

The discussions between the involved parties are ongoing, signaling a potential deal on the horizon.

Established in 2015 by fintech professionals Ashish Anantharaman, Lizzie Chapman, and Priya Sharma, ZestMoney has garnered support from notable investors like PayU, Ribbit Capital, and Omidyar Network. The startup primarily catered to individuals lacking credit card access, connecting them with lending partners and overseeing their credit management.

Its customer base of around 17 million users and partnerships with 10,000 online stores and 75,000 retail outlets positioned ZestMoney as a significant player in the fintech lending landscape.

The impending acquisition indicates a strategic move by NBFCs to capitalize on ZestMoney’s established infrastructure and user base, potentially reshaping the fintech lending sector.

Sources By Agencies