Fintech startup ZestMoney has raised $13.4 million in an extension of its Series A round of funding led by Xiaomi. Existing investors Omidyar Capital, PayU and Ribbit Capital also participated in the round. Last year the company raised $6.5 million in its original Series A funding led by PayU. In October 2015, it raised $1.7 million.

ZestMoney will use the funding to strengthen its technology and data science capabilities as well as expand use cases for the core ZestMoney Affordability Product. It will expand into travel and healthcare sectors, as well as create additional flexible credit products.

Founded in 2015 by Priya Sharma, Lizzie Chapman and Ashish Anantharaman, ZestMoney offers real-time credit approval and enables users to open accounts instantly with banks providing loans. Users can then avail equated monthly instalments (EMI) to make purchases without having to use a credit card. The company says that it uses artificial intelligence and machine learning technology to do risk profiling of e-commerce consumers who opt for the EMI payment option. ZestMoney has partnered with Amazon, Flipkart, Myntra, MakeMyTrip among others to offer these facilities.

Last year, it partnered with Xiaomi to launch Mi Finance, which enables customers to afford Xiaomi products via a cardless EMI. Earlier this month, it acquired PhotographAI, an artificial- intelligence-as-a-service platform for an undisclosed amount.

ZestMoney claims to get 3 lakh applications per month and process more than Rs 3 crores disbursals in a day. It is currently approving a loan every 7 seconds ranging from Rs 129 to Rs 4 lakhs and targets a run rate of Rs 3,000 crore disbursal by December 2018, it said in a statement.

Competition

The digital lending space is extremely competitive with players like NeoGrowth, CapitalFloat, PaySense, Paytm-backed CreditMate, CASHe, LendingKart, MoneyTap, EasySalry, Faircent, LoanMeet amongst others. Last month, digital payments company MobiKwik also announced the launch of a new service that will offer instant loans of Rs 5000 on its application.

In regards to speculated launches, California-based fintech company Tala said that it was also bringing its lending app to India. Reports claimed that Flipkart is all set to enter the financial services space with a focus on offering credit and insurance products to both consumers and sellers on its platform. Paytm is also reportedly trying to enter the lending space and is seeking a licence from the central bank to become a peer-to-peer lending platform.