Xiaomi in talks to pick up stake in ZestMoney

Chinese smartphone and electronics brand Xiaomi is in advanced talks to pick up a stake in financial technology startup ZestMoney, which it already is in partnership with for offering EMI-loans for products on its online portal Mi.com, according to two sources familiar with the matter.

ZestMoney is in talks to raise a total round of about $20 million and the round will also see participation from the startup’s existing investors like payments company PayU, according to a third source briefed on the matter.

The two companies have held talks for an investment that will also see closer integration between them to push sales on Mi.com, according to the people mentioned above.

This would be the second investment by Xiaomi in the fintech space, after having backed student-focused lending player Krazybee last year. Xiaomi and Shunwei Capital, the venture capital firm started byXiaomi founder Lei Jun, led an $8-million round in Bengaluru-based KrazyBee in October last year.

According to Raghu Reddy, head of online sales for Xiaomi, many of the company’s investments will mainly be to align with Xiaomi’s push for sales and user experience. He did not comment on Xiaomi’s talks with ZestMoney for a funding round. ZestMoney did not respond to queries.

Reddy 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 devices. For example, in content we invested in Hungama.”

Xiaomi had led a $25-million round in online entertainment company Hungama Digital Media Entertainment in 2016, mainly to introduce local content on its devices.

Investment in ZestMoney and Krazybee is mainly to help push sales on Mi.com by offering affordability, according to industry members. Xiaomi had started offering cardless EMI service for its customers in partnership with ZestMoney on Mi.com late last year.