The eight-year journey of FinTech lending company ZestMoney is coming to an end after the management in a city hall informed its employees that it will end its operations and let go of the 150 employees. This closure of India’s BNPL post comes months after the founders stepped down and the crisis-hit startup was left in the hands of new management and investors. There are also various other factors that caused the collapse of the loan company.
The start-up founded by Lizzie Chapman, Priya Sharma and Ashish Anantharaman rode the BNPL wave in India in 2020-2021 and was valued at approximately USD 435 million (after 2021 series C fundraising) after a total fundraising of USD 142 million over eight years from its existence.
ETBFSI through a timeline demonstrates the rise and fall of one of India’s largest lending companies, which has lost its ‘zest’ over time.
Calendar Year 2015:
September –
ZestMoney raised approximately USD 2 million in its seed round in September 2015, a year before its official launch.
The company was founded by Lizzie Chapman, Priya Sharma, and Ashish Anantharaman and was headquartered in Bengaluru.
Calendar Year 2016:
January –
ZestMoney had an official launch in January 2016. The company 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 over time rather than paying the full purchase amount up front.
Calendar Year 2017:
february –
ZestMoney raised USD 6.5 million in a series A round of funding led by Naspers-owned PayU on February 15, 2017. Existing investors, US-based Ribbit Capital and Omidyar Network, also participated in the round along with individual investors. The collected funds would be invested in technology and product development.
The company also sought to expand risk profiling to product categories such as travel and education in 2017.
Calendar Year 2018
August –
The digital lending company raised USD 13.4 million in a round led by Chinese smartphone maker Xiaomi in August 2018. The latest fundraising was an extension of a Series A round for the Bengaluru-based startup. Existing investors like PayU, Ribbit Capital and Omidyar Network also participated in it.
The company would use the venture capital to strengthen its technology and data science capabilities as well as expand use cases for the core ZestMoney Affordability Product.
ZestMoney has already worked with Xiaomi to create the Mi Finance product to enable Mi customers to purchase smartphones with a cardless EMI option. The company also acquired artificial intelligence platform PhotographAI for an undisclosed amount earlier in August 2018.
Calendar Year 2019:
ZestMoney has acquired NBFC Nahar Credits for Rs 17 crore, which was earlier owned by UK-based payday loan company Wonga Group. ZestMoney co-founders Lizzie Chapman, Priya Sharma, Ashish Anantharaman were earlier part of Wonga’s India operations.
April –
In April 2019, ZestMoney raised an additional $20 million and was valued at $183 million after a series B round. The new funding was led by Quona Capital, a venture capital firm focused on financial technology products. It would support the company’s expansion plans for 2019 and for other online purchases.
Australian fintech investor, Reinventure, and existing investors Ribbit Capital, Omidyar Network and PayU also participated in the round.
december –
The lending startup has raised about $15 million in an extended series B funding round.
Calendar Year 2021:
September-
ZestMoney raised USD 58 million in a Series C funding round in September 2021 led by Australian BNPL company Zip. The company was then valued at USD 435 million.
The company’s existing investors such as Goldman Sachs, Quona Capital, Xiaomi and Alteria Capital also participated in the financing.
The company said it will use the funds to develop the product range, increase the transaction network, strengthen its balance capacity and launch new business groups in insurance and savings.
ZestMoney has also received an insurance license from the Insurance Regulatory and Development Authority of India (IRDAI).
Calendar Year 2022:
The startup’s revenue increased to Rs 145 crore in FY2022, up from Rs 89 crore in FY21. However, losses increased to Rs 398.8 crore from Rs 125.8 crore a year earlier.
november –
Digital payments major PhonePe was in the process of acquiring ZestMoney. The deal amount was pegged at $200 million-$300 million. The buyout would give Walmart-owned PhonePe access to an NBFC (non-banking financial company) license, which it has long sought to own.
BNPL’s startup ZestMoney has been looking for a buyer for at least a year as it struggled to raise funding. ZestMoney was earlier in acquisition talks with Pine Labs and BharatPe, but those deals fell through.
december –
ZestMoney received USD 18 million from PhonePe to run its operations.
Calendar Year 2023:
march –
Fintech giant PhonePe pulled out of a deal to acquire ZestMoney citing issues it found during the due diligence process on March 30, 2023. PhonePe had been in talks to acquire Zestmoney for USD 200-$300 million since November 2022. The startup informed its employees that the agreement was canceled at a town hall meeting.
may –
ZestMoney founders Lizzie Chapman, Priya Sharma and Ashish Anantharaman, a troubled FinTech startup, announced their resignation to the team in a town hall on May 2023, about two months after the company’s potential acquisition by PhonePe fell through.
However, Lizzie Chapman through an internal communication said that the founders will continue to be major shareholders and will support the transition to the new management over the next four months.
july –
ZestMoney has secured a funding round of USD 5 million to USD 7 million from a group of prominent investors. Quona Capital, Zip, Omidyar Network India, Flourish VC and Scarlet Digital are among the investors who participated in this round.
december –
ZestMoney’s management has informed employees that the company will cease operations. It will also let go of about 150 employees currently working with the company.