ZestMoney, a prominent Buy Now, Pay Later (BNPL) startup once valued at $450 million, is reportedly shutting down this month and laying off its remaining 150 employees, according to media reports. The management delivered the sobering news to company’s employees.
Founded in 2016 by Lizzie Chapman, Priya Sharma, and Ashish Anantharaman, ZestMoney operated as an EMI and Pay Later network, disbursing funds directly to merchants through its lending partner. This allowed customers to repay the lender in smaller installments.
ZestMoney management informed its remaining 130 employees about the shutdown. A team will oversee the closure process, while the rest of the employees will be laid off, though they will receive their December salaries and support in finding new job opportunities.
ZestMoney faced challenges when three of its co-founders stepped down, followed by the cancellation of an acquisition deal by fintech giant PhonePe and difficulties in securing fresh capital amidst a funding downturn in the industry.
The deal with PhonePe, which was to fetch between $150 million and $300 million, collapsed over lapses in due diligence, disagreement over valuation, business sustainability and ZestMoney’s shareholding structure. According to the media reports.
The decision to cease operations highlights the complexities and challenges faced by players in the rapidly evolving BNPL sector, especially in navigating regulatory uncertainties and market dynamics increased operational challenges.