New Delhi: Two months after a deal to be acquired by Walmart-owned PhonePe failed, all three founders of Bangalore-based digital lending platform ZestMoney have resigned, plunging the eight-year-old company and its around 100 employees into uncertainty. Drowned in
“Over the past few weeks, we have done a lot of thought, and it has been difficult for us to come to a conclusion. We have stepped down from our roles as CEO (Lizzie), CFO and COO (Priya) and CTO (Ashish) at ZestMoney. Have decided to step down,” CEO Lizzie Chapman wrote in an email to employees Monday evening. Financial Officer and Chief Operating Officer, while Ashish Anantharaman was Chief Technology Officer. Chapman said all three would remain shareholders in the company and its “biggest cheerleaders”.
Around 130 Zest employees have moved to PhonePe since March, said a person aware of the development. More suits are expected to follow, said the person, who requested anonymity.
The fintech, which had around 500 employees last December, is now left with some 100.
Spokespersons at Zestmoney and PhonePe did not respond to emailed queries.
ZestMoney was a Buy Now, Pay Later platform that effectively allowed customers to avail instant digital loans, which was boosted by Non-Banking Financial Company (NBFC) Nahar Credit, which Zest Money acquired in 2019. Had done
The deal talks between PhonePe and ZestMoney started in November 2022. Peppermint It was then reported that PhonePe was ready to buy ZestMoney for $200 million-$300 million. The Zest acquisition would have given PhonePe access to an NBFC that is being adored by all fintechs.
However, the acquisition was called off in March over concerns about the quality of Zestmoney’s loan book.
A person familiar with the development then said in an interview, “After months of due diligence, the valuation dropped to $40 million-$50 million, which led to the acquisition being called off.” is quite problematic. Zest’s credit losses were 1.5 times its revenue numbers. Due to this, PhonePe was delaying and was willing to pay less than expected…even less than what Zest had raised so far.”
Several NBFCs have come to know about investing in the loan book of Zest Money.
Founded in 2015, the fintech startup has raised around $140 million from investors including PayU, Zip, Ribbit Capital, Quona Capital, Xiaomi, Omidyar Network and Goldman Sachs.
During the year ending 31st March 2022, ZestMoney sees its revenue grow by 63% to 145 crores 89 crores in the last financial year. However, the deficit more than doubled from 398.8 crores 125.8 crores a year ago.
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