Buy now pay later platform ZestMoney is shutting down its operations by December end, the company informed its employees on Tuesday. It will also let go of around 150 employees currently working with the company.
The shutdown was inevitable as it was struggling to survive even after starting from scratch. In May, the company’s three co-founders, Lizzie Chapman, Priya Sharma and Ashish Anantharaman, resigned as the firm failed to raise a new round and strike acquisition deal with digital payment platform PhonePe.
Meanwhile, Prosus wrote off its $38 million investment in ZestMoney. The investor held a sizable 19.4% stake in the Bengaluru-based firm.
During the transition, the firm also fired more than 100 employees, as per several media reports.
In July, ZestMoney reportedly raised around $5-7 million as a part of seed funding to continue operations under new leadership. However, it appears that the proceeds weren’t enough to survive longer. To recall, ZestMoney has raised around $125 million to date which also included debt financing. It closed its Series C round of $58 million led by in September 2021.
The downfall started for ZestMoney after the new guidelines for BNPL companies by the Reserve Bank of India. In June 2022, RBI prohibited all non-bank prepaid instrument issuers from loading instruments with credit lines.
Entrackr has reached out to ZestMoney for comments.
In the past two weeks, the Indian startup ecosystem has seen three shutdowns. On Tuesday, teen-centered neo-banking platform Akudo informed its users that it is winding up its operations this month. Last month, B2B networking platform Anar also said that it would shut down as it failed to figure out a business model.
