Buy Now Pay Later startup ZestMoney is looking to finalise a new funding round from existing shareholders as part of its measures to revive the fintech which also saw its founders resigning just a day before.
Existing investors Quona Capital, Zip, Omidyar Network India, Flourish VC and Scarlet Digital are expected to infuse capital in the next few weeks, the firm said in a media statement on Tuesday.
"This new capital will support the future growth of the business and finance the path to profitability," the statement said.
Ribbit Capital has the highest stake of around 18.5 percent of ZestMoney, followed by PayU with around 15 percent and Omdiyar Network at 11 percent. Goldman Sachs holds around 6.7 percent of ZestMoney.
Founders of ZestMoney Lizzie Chapman, Priya Sharma, and Ashish Anantharaman resigned on May 15 just two months after PhonePe walked away from a deal to acquire the BNPL platform.
The resignation of all three founders has raised a lot of questions about the cash-strapped ZestMoney's survival. The firm has appointed a new leadership team consisting of Abhishek Sharma, Mandar Satpute, and Mohit Chhajer.
"We will provide full support to the incoming management team and do everything we can to assist them for the next four months to ensure a smooth transition," Chapman said in the statement.
The startup, in a Townhall meeting with its 150 employees on the roll, has said there will be assured variable pay at the end of this month and hikes have been assured with the process starting next month, sources told Moneycontrol. “The company has also conveyed to the employees that there is enough runway to reach profitability in the next six months,” sources said.
ZestMoney was also given a loan of about $18 million last year by PhonePe, which acted as a ‘lifeline’ for the company, Nigam told Moneycontrol, adding that the BNPL platform was on the verge of getting bankrupt when he first met them.
In April, Moneycontrol reported that PhonePe might extend another credit line to ZestMoney. Nigam later accepted the development and said that there were discussions happening in the background and that his finance team knows more about it.
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