[YS Exclusive] BNPL ZestMoney platform raises Rs 20 Cr in debt

[YS Exclusive] BNPL ZestMoney platform raises Rs 20 Cr in debt

Buy Now, Pay Later (BNPL) Platform ZestMoney raised Rs 20 crore of debt by issuing non-convertible debentures (DTM) through private placement to its existing investor Alteria Capital.

The company spent a resolution to approve the allotment of 2,000 Series F2 non-convertible, unlisted, secured and redeemable debentures with a nominal value of Rs 1 lakh per debenture to Alteria Capital Fund II -Scheme I on a preferential basis by way of private placement , a regulatory filing assessed by Your story shows.

The resolution was adopted on June 6, 2022.

The Bengaluru-based startup had raised $50 million from Its Australian counterpart Zip Co Ltd. as part of his C-Series financing round in September 2021.

The new round brings the startup’s total funding to around $113 million. It counts Goldman Sachs, Quona Capital, Pay U, and Xiaomi among his first supporters.

Insurance game

Founded in 2015 by Priya Sharma, Ashish Anantharaman, and Lizzie Chapman, ZestMoney offers BNPL plans of note sizes Rs 50 to Rs 5 lakh payable in 30 days to 24 months. It claims to have partnered with 25 banks and non-bank lenders and works with major merchants such as Amazon, Flipkart, Google Pay, Apple and Xiaomi to offer its BNPL services to customers.

It also provides credit information, financial advice, and options to help users build a good credit history. Most ZestMoney customers (median) belong to the 23-26 age group.

ZestMoney, at present, has more than 11 million registered users and a merchant network of 10,000 online stores and 75,000 physical stores.

In 2021, the startup had secured the corporate officer Licence of the Insurance Regulatory and Development Authority of India (IRDAI), enabling it to offer and enable insurance products to users on its platform. Insurance companies will work with ZestMoney to co-create bespoke insurance plans to offer alongside its BNPL products. The platform would earn via a distribution commission from insurance players.

With the insurance license, Zest Money joins the likes of lendingkart, PoliticsBazaarAmazonPay and pay money that offer insurance online.

Recently, the Reserve Bank of India (RBI) weighed heavily on BNPL players, as it prevented non-banks from loading credit into prepaid payment instruments (PPIs), typically e-wallets or stored-value cards. The move came after some fintech companies started using non-bank credit lines (sometimes their own NBFCs) to offer credit services.

Industry stakeholders are reportedly in talks with the central bank to ask for a one-year grandfather clause to its new circular prohibiting the loading of wallets with lines of credit. The easing, if allowed, would allow lenders with outstanding prepaid cards to smoothly migrate their existing customers to another mode of issuing credit.

Edited by Teja Lele Desai


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John A. Bogar