Bengaluru-based digital lending startup ZestMoney has raised an undisclosed amount of funding from Goldman Sachs along with existing investors Naspers, Quona Capital, and Flourish.
The digital lender will use these funds to focus on product development and strategic partnerships to scale its platform.
Recently, ZestMoney has announced a strategic partnership with Japan-based credit financing company Credit Saison and has allocated $100 million funds to expand the digital lending space in India.
Earlier in January this year, the startup has raised funds from Alteria Capital followed by ₹140 crores investment from Ribbit Capital, Quona Capital, PayU and Omidyar Network in April. ZestMoney also raised about ₹95 crores in an extended Series A round from Chinese smartphone manufacturer Xiaomi in August last year.
Founded by Lizzie Chapman, Priya Sharma and Ashish Anantharaman in 2015, the startup is a digital lending platform backed by artificial intelligence that offers lending services to consumers who have limited access to conventional credit facilities due to credit history gaps. The startup offers instant account opening and real-time credit approval.
According to the firm, there are approximately 60 crores people in India who are creditworthy but are overlooked by banks and other financial institutions due to traditional credit scoring mechanism or lack of proper credit history. Furthermore, credit card penetration in the country is among the lowest with less than 5% of adults holding a credit card.
ZestMoney has partnered with more 3,000 merchants including Amazon, Flipkart, Xiaomi, Myntra, MakeMyTrip, PepperFry, Yatra, Paytm, Titan, Uber, Big Bazaar and several others to allow customers spend through equated monthly installment options without needing a credit card or credit score.
ZestMoney has more than 60 lakh registered users and an annual run rate of more than $1 billion in loan disbursal run rate by 2021.
According to a BCG report of 2018, the digital lending market in India has the potential to become a $1 trillion sector by 2023 and is among the highest growing industry with 30% year-on-year growth. The current market stands at $50 billion which is almost ₹3,00,000 crores in Indian Rupees.
Other players in the digital lending industry include LoanTap, Credy, KreditBee, CashBean, EarlySalary, PaySense, Qbera, and several P2P lending platforms like i2ifunding, etc. You can read our list of P2P lending startups in India.