Fintech Startup ZestMoney Raises Funding From Alteria Capital

Bengaluru-based digital lending startup ZestMoney has raised an undisclosed venture debt funding from Indian venture debt fund Alteria Capital.

ZestMoney, which enables real-time credit approval, was founded in 2015 by  Lizzie Chapman, Priya Sharma, and Ashish Anantharaman in August of last year raised $13.4 Mn in an extended Series A round of funding led by Chinese smartphone maker Xiaomi.

“We are at a critical growth juncture and in a rapid expansion phase. Our determination is to enable every Indian with the power of credit, whether it is to support education, or shop for their dream commodity, ”said Lizzie Chapman – cofounder and chief executive officer (CEO) of ZestMoney.

Other backers of ZestMoney, include PayU (Naspers), Ribbit Capital and Omidyar Network, who have invested in the startup that also provides its users instant account opening and digital loan servicing.

The startup has partnered with the likes of Amazon, Flipkart, Xiomi, myntra, Makemytrip and Pepperfry, wherein customers can purchase items and pay in digital EMI, without the need of a credit card or a credit score.

According to the ‘Indian Tech Startup Funding Report 2018’, the country saw 121 fintech deals in 2018 worth about $1.4 Bn . According to the report, last year saw a sharp decline of 51.66% in the amount invested in fintech startups as compared to 2017, which is an indication of saturation in the Indian fintech sector, where licensing is going to be a decisive factor for VC investments in startups.

“The startup is solving a very large problem in providing seamless access to credit to a large section of the Indian population using technology effectively. We are very happy to partner with ZestMoney as they change the landscape of Indian retail digital credit, ” said Vinod Murali, cofounder and managing partner, Alteria Capital.

India is still a country where people prefer physical cash but that is rapidly changing . The Indian digital payments industry is expected to reach $700 Bn by 2022 in terms of value of transactions, according to a Research and Markets Report.

Alteria Capital, which claims to be  India’s largest venture debt fund, invested $3.6 Mn (INR 25 Cr) in Bengaluru-based home healthcare services provider Portea Medical and its investment in ZestMoney is its second deal announcement in 2019 having invested $4.2 Mn in Pune-based fast food chain and online food delivery company Faasos last week. 

Alteria Capital has committed about $39.3 Mn (INR 275 Cr) across more than 15 transactions till last year and in October, the venture fund announced the second close of its fund at $85.48 Mn (INR 625 Cr), after just a year of inception.