ZestMoney, a Bengaluru-based startup, has reportedly raised US$13.4 million in a financing round led by Chinese tech company Xiaomi, which is best known for its smartphones and other gadgets.
ZestMoney is an Indian online lending startup that offers installment payment plans for shoppers who wish to purchase a laptop, mobile phone or other electronics, but can’t pay the whole sum at once. This type of loan is useful in countries where credit card ownership is low and shoppers would otherwise not be able to make the purchase at all.
The installment plan feature by ZestMoney is available on several online shopping sites in India, such as Flipkart, Amazon, and Jabong. ZestMoney has an existing partnership with Xiaomi, which means shoppers can use it to buy products from the latter’s online store.
Including this round, the company has raised a total of US$22 million. The three previous investors, PayU, Ribbit Capital, and Omidyar Network, also participated in this round, says ZestMoney.
Takeaways:
— This strategic investment is one of many for Xiaomi, which is transitioning from phone maker to tech company. Online lending startups are interesting to Xiaomi because they enable more shoppers to buy its products.
— Xiaomi is doubling down on India because the massive country is an important market for the Chinese firm’s core offering: cheap smartphones. For a while, it was the most popular smartphone brand in India, but lost that spot to Samsung this year.
— Lending and online credit startups are generally getting a lot of attention from strategic investors lately. In India, Capital Float, a business loan company, recently raised US$22 million from Amazon. In Indonesia, Kredivo – a startup similar to ZestMoney – raised US$30 million in a round led by an Australian investor.