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DMI Group acquires ZestMoney in strategic deal amid distress

Mergers and acquisitions

DMI Group, a leading pan-India financial services platform, has successfully acquired ZestMoney, a troubled buy now pay later (BNPL) startup. The acquisition, made through DMI Finance, comes after ZestMoney faced challenges in trying to revive its business under new management and amid regulatory uncertainties.

DMI’s NBFC arm, DMI Finance, is set to become a preferred lender on the ZestMoney platform and will acquire exclusive rights to use all ZestMoney brands. While the exact financial details of the transaction remain undisclosed, the move is expected to change the face of digital and cash register financing in India.

Shivashish Chatterjee, Co-Founder and Joint Managing Director of DMI, expressed his excitement over the acquisition and highlighted ZestMoney’s pioneering role in providing treasury financing in India. “We have been working with ZestMoney for over 8 years in various capacities. We strongly believe that this acquisition will be an important step in our journey to deliver digital financial inclusion at scale across India,” said Chatterjee.

Founded in 2015, ZestMoney introduced a fully automated digital customer onboarding and service system that allows users to instantly apply for and receive digital credit at the point of sale. With a robust network of over 80,000 merchants, including major players like Amazon, Flipkart and Myntra, ZestMoney is a major player in the BNPL space.

Mandar Satpute, chief operating officer of Zest, expressed optimism about the future with DMI. “DMI is at the forefront of digital lending in India. They bring strong capital backing and deep expertise. DMI was an early supporter of ZestMoney and we are very excited to take our partnership to a whole new level.”

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The acquisition is poised to provide DMI with an expanded customer base, a stronger balance sheet and an enhanced risk management experience. DMI aims to leverage ZestMoney’s cashier funding platform to expand its engagement with customers and merchants across both online and offline networks.

Founded by Lizzie Chapman, Priya Sharma and Ashish Anantharaman, ZestMoney has faced challenges in 2023, including the collapse of a proposed acquisition by fintech giant PhonePe. Despite reaching a valuation of $470 million at its peak and having a registered user base of 17 million, the company ran into difficulties due to changing regulations and funding issues.

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