Goldman Sachs ploughs a capital of $15 Mn into Indian Fintech Statrtup ZestMoney

Raising a $15 Mn investment

ZestMoney has managed to raise the funding from one of America's largest banks to help the enumerable amount of Indians to secure a loan without a credit score and to make purchases online for the first time in their lives. Some of the existing investors who also have their stake in the above investment are Naspers Fintech, Quona Capital and Omidyar Network.

The co-founder and chief executive of ZestMoney, Lizzie Chapman told in an interview that the new funding was a part of extended Series B round which collectively brought a total investment of $63 Mn to date. She also informed in the interview that the first tranche was announced in April this year.

The thought process behind Idea

The users of credit cards remain scanty across the country, merely three in a hundred people possess a credit card. This means that quite a small amount of people have a traditional credit score and Banks deliberately rely on these numbers to establish the creditworthiness for issuing a loan.

Mainly banks do not provide small loans as they hamper lucrative returns and it also achieves less incentive on writing such cheques. Many startups in India have recently tried to step in to address this void. So what ZestMoney does is assess several data points and used Artificial intelligence to help people in profile construction and become creditworthy.

Partnerships and Merchandising

• Overall ZestMoney has 3000 merchants, some of them are Flipkart, Amazon, and Paytm. They are offering different financing options to customers at point-of-sale.
• The company has more than 6 Mn users with credit access of $140 to $3000. They provide schemes that offer the interest-free option so that payback is possible in a scheduled time limit.
• The startup has also partnered with big online payment platforms including Razorpay, Billdesk, Cashfree, and PayU. They have also raised some unspecified amount of debt to benefit their customers with finance credits.

The Managing Director of Goldman Sachs, Philip Aldis said that startup has the potential to reach more households in India and they are looking forward to leveraging their global experience in the continuous growth of Zestmoney.

The startup has a target of disbursing $1 Bn of credit in 18 months and to reach 300 million users. Boston Consulting Group claims that digital lending has the capacity to outreach $1 trillion opportunities in the upcoming five years.