Chinese smartphone maker Xiaomi has made an investment in a financing startup ZestMoney in India with the objective of helping buyers of their phones with soft loans or EMI options, which they may not be in a position to avail otherwise.
The amount invested in this round in $13.4 million (Rs 93.6 crore) and is an extended Series A round. Besides Xiaomi, some existing investors in ZestMoney like PayU, Ribbit Capital and Omidyar Network are also reported to have participated.
ZestMoney, owned by Camdem Town Technologies and headquartered in Bengaluru is already in the business of what is calls lifestyle financing and has named its offering ZestMoney Affordability Product. Customers logging into ZestMoneyâ€™s site or app will be helped to open bank accounts instantly and with that they can avail the EMI options even if they did not possess a credit card. Technology is used to make a fair assessment of the applicantsâ€™ creditworthiness.
"They (Xiaomi) have built one of the most loved brands in India and they have a passionately consumer-focused philosophy which deeply resonated with our values as a company," VCCircle quotes Lizzie Chapman, co-founder and chief executive at ZestMoney as saying.
Xiaomi already has an ongoing relationship with ZestMoney having jointly floated Mi Finance with the same objective as outlined above.
The freshly raised funds will be used by ZestMoney in enhancing its technological capabilities and the scope and type of financing options its customers can avail, going ahead. These may include sectors like travel and healthcare. The company says it receives 3 lac applications a month for loan processing.
The last Series A round investment came when PayU, which is backed by South African investment company Naspers, had picked a $6.5 million tab around a year back.
For Xiaomi, such investments are only an extension of what they have already done in their home country China and ZestMoney may benefit from this association through their first-hand experience in the domain.