Xiaomi looking to buy stake in fin-tech start-up ZestMoney
What's the story
According to reports, Xiaomi is looking to buy a stake in fin-tech start-up ZestMoney. The two companies are already in partnership since late last year, with ZestMoney offering cardless EMI loans on Xiaomi products on Mi.com. With the investment, Xiaomi aims at enabling a closer integration between the two companies to offer affordability on Xiaomi's products, and ultimately push sales on Mi.com.
Details
ZestMoney in talks to raise $20 million in upcoming funding
This comes in the light of ZestMoney looking to raise about $20 million in fresh funding, a round that will also see participation from existing investors PayU and Ribbit Capital besides Xiaomi. This will be Xiaomi's second investment in the fin-tech space. In October last year, Xiaomi led an investment of $8 million in Bengaluru-based student-focused lending start-up KrazyBee.
Motive
Xiaomi's investments will align with its push for sales
While Raghu Reddy, head of online sales at Xiaomi, did not directly address the rumors around ZestMoney, he said that the company's upcoming investments will align with its push for sales and user experience. "We will look at companies that complement our business, offer affordability and payment solutions, or offer good content that can be part of our devices," Reddy said.
Background
The Indian fin-tech market is current pegged at $1.2 billion
Founded in 2015, ZestMoney offers EMI services, instant account opening, real-time credit approval, e-commerce check-out, digital loans, and repayments technology. The Bengaluru-based start-up has worked with Amazon, Flipkart, and MakeMyTrip. It raised $2 million in seed funding and then $6.5 million in 2017. According to a KPMG-NASSCOM report, the Indian fin-tech market will touch $2.4 billion by 2020, up from the current $1.2 billion.