On Wednesday night, DMI Group, a pan-India financial services platform, announced that it had bought the ailing 'buy now pay later' (BNPL) ZestMoney business. DMI, which has received more than $1.5 billion in equity investment and is backed by global institutional investors and foreign banks, did not disclose the transaction's value.

This development comes more than a month after Bengaluru-based ZestMoney shut operations due to a failed attempt to restart its firm under new management and regulatory concerns. DMI Finance, DMI's NBFC subsidiary, will be the preferred lender on the ZestMoney platform. DMI will have exclusive rights to all ZestMoney brands as a result of this acquisition.

"ZestMoney was a pioneering provider of checkout finance in India. "We are always looking for best-in-class solutions to improve our customer and merchant base's engagement and experience," said Shivashish Chatterjee, DMI's co-founder and joint managing director. "We've been working with ZestMoney for over 8 years in various roles. We are certain that this acquisition would be a significant step in our mission to achieve digital financial inclusion at scale across India." 

DMI Finance, DMI's NBFC subsidiary, will be the preferred lender on the ZestMoney platform. DMI will have exclusive rights to all ZestMoney brands as a result of this acquisition.

"ZestMoney was a pioneering provider of checkout finance in India. "We are always looking for best-in-class solutions to improve our customer and merchant base's engagement and experience," said Shivashish Chatterjee, DMI's co-founder and joint managing director. "We've been working with ZestMoney for over 8 years in various roles. We are certain that this acquisition would be a significant step in our mission to achieve digital financial inclusion at scale across India."

"DMI is at the forefront of digital lending in India. "They bring strong capital support and deep expertise," said Mandar Satpute, Zest's COO. "DMI has been an early supporter of ZestMoney and we are very excited to take our partnership to a whole new level."

Lizzie Chapman, Priya Sharma, and Ashish Anantharaman established ZestMoney in 2015, allowing customers to pay for things in installments yet utilise them immediately away. ZestMoney's founders quit last May, three weeks after fintech firm PhonePe decided to postpone its proposed acquisition of the startup. This left the firm's employees with an unclear future.

The contract with PhonePe was expected to be worth between $150 million and $300 million, but it fell through. According to the sources, the firm had been having difficulty raising new cash due to a funding drought. In April, ZestMoney lay off 100 people, or around 20% of its workforce.

After three co-founders of ZestMoney resigned, the Goldman Sachs-backed financial technology startup formed a new leadership team to oversee the company. ZestMoney is now led by Abhishek Sharma, head of growth, Mandar Satupte, chief banking officer, and Mohit Chhajer, vice-president of finance and financial operations (FinOps).

At its peak, ZestMoney had 17 million registered users and was available at 85,000 retail touchpoints throughout India. It was valued at $470 million. However, many lenders or non-banking financial corporations that worked with ZestMoney gradually ceased doing so after the RBI tightened rules for digital lending and personal loan guidelines, according to persons familiar with the situation.

In a town hall meeting on December 5, new management informed staff that the company was closing and laying off the remaining 130 employees. A small crew was hired to handle the company's closure.