Fintech lender ZestMoney, which announced earlier this month it will cease operations by the end of the year, is likely to be acquired, as both Aditya Birla Finance and DMI Finance are trying to ‘scoop up’ the company, Economic Times has reported.
The NBFCs (non-banking financial companies) have been partners at ZestMoney and have evaluated the Bengaluru-based startup’s loan book, the report stated.
“The lenders are looking to acquire ZestMoney’s technology platform, and to take over the loan book, which it had sourced for its partners,” a person aware of the developments said.
The lending firm has an outstanding loan book that amounts to around ₹400 crore, the person added.
Reason for interest in ZestMoney?
A second person the publication spoke to, noted how two features in particular, could be the reason behind this interest.
“ZestMoney has a large customer base on whom credit underwriting has been done. There is also this technology platform which can be useful for a traditional NBFC, and these have interested both the companies,” the person explained.
The said platform is a co-lending facility on which fintech and banks can participate; it was built after the Reserve Bank of India (RBI) released digital lending guidelines in 2022.
How long for a deal to be finalised?
The talks are underway and a deal could be signed ‘soon.’
About ZestMoney
The startup was founded in 2015 by fintech professionals Ashish Anantharaman, Lizzie Chapman, and Priya Sharma, and is backed by investors such as PayU, Ribbit Capital, Omidyar Network, and others.
Primarily serving people with no access to credit cards or an alternative financial option, it put its customers in touch with its lending partners, and managed the customers’ credit on their behalf.
It built a base of around 17 million (1.7 crore) users and was accepted across 10,000 online stores and 75,000 retail shops.