Bangalore-based ZestMoney raises $15 million from Goldman Sachs enabling Indians more access to credit
The new investment is said to be part of an extended Series B round totalling ZestMoney’s raise to date to $63 million
Bangalore-based ZestMoney has raised $15 million (£11.5m, €13.5m) from Goldman Sachs and existing investors Naspers Fintech, Quona Capital and Omidyar Network.
The company loans money to those without a credit score and helps them to make purchases online. The new investment is said to be part of an extended Series B round, the first tranche of which was announced in April this year.
This funding brings ZestMoney’s total money raised to date to $63 million.
The usage of credit cards remains low in India with roughly three in 100 people owning a credit card. This means that very few people in the nation have a traditional credit score, making it less likely for banks to be able to establish credit worthiness in order to issue a loan.
ZestMoney says it assesses other data points and uses Artificial Intelligence to help these people build a profile and become creditworthy.
The startup has partnered with over 3,000 merchants, up from around 800 in late April. Partners include Flipkart, Amazon, and Paytm. Zestmoney offers financing options to customers of these merchants at point of sale.
It has amassed more than 6 million users, each of whom can access credit of between $140 and $3,000.
ZestMoney has also raised an unspecified amount of debt, which it uses to finance credit to customers. It recently entered in a strategic partnership with Credit Saison, a Japanese financial services company affiliated with Mizuho Financial Group, to provide $100 million towards expanding digital lending in the country.
Philip Aldis, a managing director at Goldman Sachs, said the firm’s investment in ZestMoney would enable more households in India to access credit.
The company aims to offer credit worth $1 billion within 18 months and is targetting 300 million users.
FURTHER READING: Goldman Sachs plans mass-market digital wealth management