Lending startup Zestmoney shuts down, lays off 150 employees: Report
The decision to close operations comes months after the founders stepped down, leaving Zestmoney in the hands of investors and a new management.
ZestMoney, the buy now pay later (BNPL) startup will shut down amid regulatory uncertainty and a failed bid to revive its business. The management in a townhall on Tuesday informed its employees that will wind up its operations and let go the 150 employees, Moneycontrol reported.
The company will retain a legal and finance team to oversee the closure. The decision to close operations comes months after the founders stepped down, leaving Zestmoney in the hands of investors and a new management.
The company was founded in 2016 by Lizzie Chapman, Priya Sharma and Ashish Anantharaman, and had a customer base of 17 million and enables loan disbursals of ₹400 crore per month. It also had 27 lending partners and merchant partnerships with 10,000 online brands and 75,000 offline stores.
The startup said that its turnaround plan, the ‘ZestMoney 2.0’ or ‘ZeMo 2.0’ could not take off. According to report, the company has promised to pay two months of severance payment and outplacement support to the laid off employees.
An employee told the website that the staffers did not expect that the company will shut down operations. The employee said many of the colleagues have started reaching out for jobs outside.
Last year, the Reserve Bank of India had barred operating non-bank insitutions or fintech companies, including several ‘buy now, pay later’ services from loading credit lines into prepaid payment instruments like wallets and prepaid cards.
In November 2022, UPI provider PhonePe was in talks to acquire the lending platform but it cancelled its plan this year over disagreement on valuation. After the deal fell through, Zestmoney laid off 100 employees.