In a significant move within the financial landscape, DMI Group has officially acquired the buy now pay later (BNPL) startup, ZestMoney. The acquisition, finalized on Wednesday, marks a strategic shift for DMI Finance, the non-banking financial company (NBFC) arm of DMI, positioning it as the preferred lender on the Zest platform.
While the specific financial details of the deal remain undisclosed, it is apparent that ZestMoney’s acquisition by DMI Group is a distress sale. This development comes just weeks after ZestMoney formally ceased operations, leading to the unfortunate layoff of its entire workforce by December.
Post-acquisition, DMI Group will gain exclusive rights to all Zest brands, providing an opportunity to extend its reach to ZestMoney’s user base and diverse product suite. This move will enhance DMI’s engagement in the digital, housing, and asset finance sectors, reinforcing its position as a financial services conglomerate.
Founded in 2008, DMI has evolved into a robust financial entity focusing on digital, housing, and asset finances. The conglomerate boasts a substantial investment of over $1.5 billion from renowned investors, including prominent banks. DMI Finance, its digital lending arm, offers a range of products such as consumption, personal, and MSME loans. In April 2023, DMI Finance successfully concluded a $400 million equity round led by Mitsubishi UFJ Financial Group, Inc., highlighting its growth trajectory.
On the other hand, ZestMoney, despite raising approximately $125 million during its existence, faced challenges that led to its closure. The company’s Series C funding round, valued at $58 million in September 2021, was insufficient to overcome stringent regulations on BNPL startups and the challenging funding environment. The result was ZestMoney’s decision to shut down completely.
Remarkably, ZestMoney is the second company to be acquired by a larger group after the departure of all co-founders. In a parallel incident last year, GoMechanic experienced a similar fate, being acquired by LifeLong Group, while its three co-founders departed amidst financial irregularities.
As DMI Group integrates ZestMoney into its financial ecosystem, the acquisition is expected to bring new dimensions to its service offerings and further solidify its standing in the ever-evolving financial sector.
