DMI Group Acquires ZestMoney in a Fire Sale

Indian buy now, pay later (BNPL) start-up ZestMoney, once valued at $450 million, has been acquired by DMI Group in a fire sale. Reports in December signalled ZestMoney’s impending closure after unsuccessful attempts to secure a buyer or raise additional capital.

The acquisition provides DMI Group with access to all of ZestMoney’s brand rights. As part of the deal, DMI Finance, the group’s non-bank financial company (NBFC), will become the preferred lender for the Zest platform. Additionally, ZestMoney’s checkout financing platform will be integrated into DMI Group’s product suite.

DMI expects the acquisition to enhance its engagement with current and potential customers, aiming to expand the fintech’s merchant network. Shivashish Chatterjee, co-founder and joint managing director of DMI, sees the takeover as a crucial step in providing digital financial inclusion at scale across India.

ZestMoney, once considered a key player in India’s BNPL market, faced challenges throughout the year. Despite being valued at $450 million and raising around $130 million since its inception in 2015, the fintech encountered difficulties raising new capital. A proposed acquisition by Indian payments giant PhonePe in April 2023 fell through, reportedly due to concerns over ZestMoney’s business model and debt liability.

The failed acquisition led to the departure of all three of ZestMoney’s original founders in May. The fintech’s attempts to secure fresh funding proved insufficient, culminating in reports of its imminent closure in December. Now, DMI Group, operating a financial platform across India, has stepped in to acquire ZestMoney, though the financial terms of the takeover have not been disclosed.

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