With the decision to wind down operations, ZestMoney has laid off the remaining 150 staffers, as the company failed to turn around the business, after acquisition talks with fintech major PhonePe fell through in March this year.
ZestMoney may retain some staffers from legal functions to ensure the wind down process.
In August, ET had reported that the fintech firm had secured fresh capital from its existing investors including Quona Capital, Omidyar Network India, Flourish Ventures, Zip and Scarlet Capital, to continue operations.
ETtechFounded in 2015 by Lizzie Chapman, Priya Sharma and Ashish Anantharaman, ZestMoney began life as a loan-sourcing platform to enable quick disbursal of credit at the point of sale, mainly focussed on online merchants.
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It worked with ecommerce majors like Flipkart, Amazon, Myntra and Nykaa to offer pay-later as a product and worked with multiple lenders such as Aditya Birla Finance, Tata Capital and Hero Fincorp.
After the talks of a complete acquisition fell through, ZestMoney tried to change its business model and offer its technology stack for credit as a white-label solution to other fintech lenders and non-banking finance companies (NBFCs).
The process of Zest’s acquisition began in November last year, when Walmart-owned PhonePe signed a non-binding term sheet to acquire the lending startup. However, by March, this year, PhonePe called off the deal over concerns arising from its due diligence.
PhonePe had also brought on board as many as 150 of ZestMoney’s employees to build its own lending platform, after deal talks fell through between both entities.
PhonePe had also handed over a debt of $18 million to cash-strapped ZestMoney, ET had reported on April 26.
