Bengaluru-based lending startup ZestMoney has raised $20 million in fresh funding led by Washington based fintech investment firm Quona Capital.
Australia based fintech investor group Reinventure, existing investors Ribbit Capital, Omidyar Network and PayU are also participate in this round.
The company will use this fund to invest in tech space and hiring.
As per the press release, ZestMoney will hire 60 engineers and 20 data scientists in one year and improve integration with partner NBFCs and online retailers with whom it offers EMI options to customers.
“Quona and Reinventure are both specialist fintech venture funds. There’s definitely a lot of momentum in our space right now, with everyone in e-commerce talking about affordability through EMI and we’re just riding off the back of that,” said Lizzie Chapman, co-founder and CEO of ZestMoney.
“The value of ZestMoney to consumers is being accepted everywhere with the same credit limit useable across all e-commerce platforms,” said Chapman. “This would mean every transaction a consumer makes adds up to give them a better credit limit and better pricing, anywhere they want to shop.”
Growing competition, however, could lead to an increase in cash burn for players in this space, especially with the entry of giants. Unlike in payments, where companies use cashbacks to bring about a change in consumer behaviour, consumer lending shouldn’t see such burn, ZestMoney says, but there could be increased spends on customer acquisition through brand building.
“I do think the spend on branding will go up and we’re okay to do that considering we’ve not done much of it. But, definitely, the competition will mean raising money will start picking up and you’ll see a lot more deals in the space,” Chapman said.
ZestMoney has raised total of $42 million including this round of funding.