Australia's Zip enters Indian buy-now-pay-later space with ZestMoney deal

By Reuters

<div> <p> -Australian buy-now-pay-later (<span class="caps">BNPL</span>) firm Zip Co Ltd said on Wednesday it would invest $50 million to acquire a minority interest in Indian peer, ZestMoney, as part of its plans to tap new growth markets and add investors.</p> <p>The investment comes at a time of increasing popularity of the <span class="caps">BNPL</span> sector, where customers pay in instalments without any interest for their online purchases, as the <span class="caps">COVID</span>-19 pandemic pushed young shoppers to look for easier access to credit.</p> <p>Zip, Australia’s second-biggest <span class="caps">BNPL</span> player, is expanding its footprint in the rapidly growing sector, acquiring companies in Europe and the Middle East over the past one year.</p> <p>Its investment in Bengaluru, India-based fintech ZestMoney marks its entry into a market with a massive young demographic, which is gravitating more towards cash-less payments and has a huge growth potential in the <span class="caps">BNPL</span> and e-commerce space.</p> <p>“With deep partnerships with online and offline merchants and lending partners, ZestMoney is poised to accelerate growth as the market develops,” Zip Chief Executive Officer Larry Diamond said.</p> <p>Zip said it had negotiated terms to increase its shareholding in ZestMoney over time.</p> <p>The <span class="caps">BNPL</span> space saw established players testing newer areas of business to power growth, with Australian <span class="caps">BNPL</span> giant Afterpay getting a $29 billion offer from Square Inc, and U.S. payments giant PayPal acquiring a Japanese firm for $2.7 billion.</p> </div>