ZestMoney, a Buy Now Pay Later (BNPL) firm will be shutting down its operations this month (December, 2023). The company will also lay off the remaining 150 employees, according to multiple media reports. The company which once valued $450 million informed about shutting down during a townhall meeting on Tuesday, December 5.
As per the information, the decision has been taken due to the regulatory uncertainty and the failure of ZestMoney to gain traction under new management. The company started facing issues in early 2023 when PhonePe, a Walmart-owned fintech company decided to halt its proposed acquisition of the company.
According to a report by India Today, “The deal, initially anticipated to be valued between $200 million to $300 million, encountered obstacles during due diligence, with issues such as valuation disagreements and a high default rate (around 10-12%) surfacing.”
The company faced challenges despite raising approximately $140 million from investors including PayU, Xiaomi, Goldman Sachs, Ribbit Capital, and more.
ZestMoney was founded by Priya Sharma, Lizzie Chapman, and Ashish Anantharaman in 2016 and operated as an EMI and Pay Later network. In the fiscal year 2022, the company revenue increased to Rs. 145 crore against Rs. 89 crore in FY21. However, it reported a surge in its losses to Rs. 398.8 crore compared to Rs. 125.8 crore a year ago.
