Aussie fintech Zip eyes India as it invests $50m in local buy now, pay later player

Listed Australian buy now, pay later provider Zip has agreed a $50m strategic investment in Indian BNPL firm ZestMoney, in a move designed to expose Zip to the Indian market.

Zip said its investment was part of its plan to build a global BNPL business, with India as a key market where ZestMoney already has over 11m registered users and over 10,000 online merchants.

“While Buy Now, Pay Later is emerging as a preferred mode of payment globally, in India it also plays a crucial role in driving access to credit,” said Zip’s CEO and co-founder Larry Diamond.

“With more people using digital payments and online shopping, ZestMoney can positively impact hundreds of millions of lives in the coming years.”

Zip is Australia’s second-largest buy now, pay later provider after AfterPay—which Square is in the process of acquiring—and operates in 11 other markets including Canada, the UK and the US.

The fintech has been on an acquisition spree these last few months, snapping up Twisto Payments in Europe, UAE-based Spotii Holdings and Payflex in Africa.

As part of this latest investment, Zip says it has negotiated terms to increase its shareholding in ZestMoney over time, hinting that a full acquisition could be on the horizon.

By 2025 ZestMoney expects buy now, pay later to have overtaken credit card payments in India, with between 80-100m users in a BNPL market worth around $120bn.

“We believe India will leapfrog traditional products like credit cards, along with many other emerging markets, going straight to digital payment solutions,” says ZestMoney CEO and co-founder Lizzie Chapman. 

“We strongly believe India will emerge as the largest BNPL market in the world over the next 5 years.”