Xiaomi is expanding its investment portfolio with an investment in Indian financial technology startup ZestMoney in the latest round of funding. According to a recent report from ET, two sources familiar with the matter have revealed that the company is in advanced talks to pick up a stake in ZestMoney which is looking to raise about $20 million in funding.
The report also reveals that Xiaomi is already in a partnership with ZestMoney, which offers EMI-loans on products purchased via Xiaomi’s online store Mi.com. ZestMoney’s latest round of funding will also see participation from existing investors including payments company PayU, according to a third source. The two companies have reportedly held talks for an investment which will also result in closer integration between the two to push sales on Mi.com.
If the deal goes through, this will be Xiaomi’s second investment in the fintech space followed by its investment in Krazybee last year. Xiaomi, along with Shunwei Capital, a venture capital firm started by Xiaomi founder Lei Jun, led an $8 million round of funding in Bengaluru-based Krazybee in October last year. The company also led a funding round of ShareChat earlier this year.
Raghu Reddy, head of online sales for Xiaomi, further revealed that several of the company’s investments will be directed at aligning its push for sales and user experience. While he didn’t comment on Xiaomi’s talks with ZestMoney, he said:
“We will look at companies that complement our business, offer affordability and payment solutions, or offer good content that can be part of our device…For example, in content we invested in Hungama.”
As of now, ZestMoney has not responded to queries regarding the investment, however, Xiaomi’s investment in ZestMoney and Krazybee is expected to help the company push sales on Mi.com by offering users with easy and affordable cardless EMI options. Mi.com, according to a recent report by Counterpoint Research, is already the third-largest e-commerce website in the country after Flipkart and Amazon, and currently holds a 10% market share in online smartphone shipments.