ZestMoney sets up new leadership team, a day after founders resign

“As we move into the next chapters of our own journeys, we confidently hand the baton to Mohit Shager, Mandar Satpiot and Abhishek Sharma to lead the company into the future,” said Lizzie Chapman, CEO of ZestMoney, in a comment. Linkedin post.

ZestMoney’s founders have resigned, several weeks after fintech giant PhonePe decided to halt a proposed buy-now, pay-later (BNPL) platform.

Lizzie Chapman, Priya Sharma and Ashish Anantharaman, co-founders of ZestMoney, informed employees of their decision on Monday evening. This has put around 100 employees of the Bengaluru-based company in an uncertain future. The sources said the company is finding it difficult to raise new capital amid a funding winter.

“Over the past few weeks, we’ve done a lot of thinking and it’s been difficult for us to come to that conclusion. We have decided to step down from our positions as CEO (Lizzie), CFO and COO (Priya), and CEO (Ashish) of ZestMoney,” Chapman said, In a letter to the staff on Monday evening.

In March this year, PhonePe canceled a deal to acquire ZestMoney. In April, ZestMoney laid off 100 employees, or about 20 percent of its workforce. The deal with PhonePe, which was set to fetch between $150 million and $300 million, collapsed due to lapses in due diligence, disagreement over valuation, business sustainability, and ZestMoney’s stake structure, according to the people named above. Other sources said the deal’s collapse was also attributed to a slowdown in the fintech sector amid a funding winter, a tough regulatory environment, and macroeconomic uncertainty.

PhonePe provided about $18 million in loan to ZestMoney when it was evaluating the acquisition. ZestMoney, which is backed by Goldman Sachs and Xiaomi, had about 450 employees, all of whom were expected to be absorbed by PhonePe if the acquisition went through. The company is now left with about 100 people.

Founded by Lizzie Chapman, Priya Sharma, and Ashish Anantharaman in 2015, ZestMoney allows customers to pay for products over time, but use them immediately. The increasing penetration of smartphones, the cheapest data plans in the world, and the boom in online shopping have fueled the demand for pay-as-you-go offers in the country.

ZestMoney has a registered user base of 17 million and is live at 85,000 retail touch points across India.

There was a media report that said ZestMoney’s technical assets and bad loans were being transferred to PhonePe. However, on Monday night, Sameer Nigam of PhonePe clarified that PhonePe has not taken any of ZestMoney’s technology, intellectual property, customer, business or non-operating assets. He also said that PhonePe has not taken on ZestMoney (Non-Banking Financial Corporation) NBFC and is not hiring more employees from the company. Nigam said in a tweet: “We purchased a copy of their technical IP and separately hired about 130 ZestMoney employees.

The company was valued at $470 million in its latest funding round. ZestMoney raised $50 million in September 2021, which the company had topped with a $20 million increase as part of its Series C round. The company has raised a total of $140 million from investors such as Australian BNPL platform Zip, Goldman Sachs, Quona Capital, and Xiaomi.