Fintech firm ZestMoney's existing investors such as Quona Capital, Omidyar Network India, Flourish Ventures, Zip, and Scarlet Capital have pumped in funds, months after its sale fell through and the founders exited the firm.
The fresh capital infusion will give the embattled buy now pay later startup, bereft of funding and founders, a much-needed lifeline, as it aims to become profitable.
"The new funding will support the business as it drives towards profitability, and the company’s investors, made up of leading international and Indian fintech investors, are excited about its next chapter," the company said in a prepared statement on Tuesday.
Talking about the runway available for ZestMoney, the statement said that it gave enough funding to get to profitability soon.
"Anything more is welcome to further drive our growth moving forward. The current round raised in such a funding environment for the fintech sector globally is a testament to both the Zest model and the market opportunity," the statement said.
During an exclusive interview with Moneycontrol, Lizzie Chapman, cofounder of ZestMoney said that the existing investors will pump funds into the business.
"The investors, as I said, have been mostly working on this idea for an internal round and working on getting alignment among all the investors," Chapman said.
The firm did not disclose the funding size, however, sources told Moneycontrol that it was between $5 million and $10 million.
In Macrch, Walmart-backed PhonePe called off its deal with ZestMoney over due diligence concerns that led to a huge setback for the BNPL platform.
According to media reports, PhonePe would have paid $200-300 million to ZestMoney if the deal had gone through, much less than BNPL firm's last valuation of $470 million.
ZestMoney had been looking for a buyer for at least a year now as it has struggled to raise funds, according to multiple sources. The unsuccessful deal coupled with RBI's stringent regulations on BNPL businesses led to financial troubles within ZestMoney.
Founded in 2016 by Lizzie Chapman, Priya Sharma and Ashish Anantharaman, ZestMoney has a customer base of 17 million and enables loan disbursals of Rs 400 crore per month. The company has 27 lending partners and merchant partnerships with 10,000 online brands and 75,000 offline stores.
In May of 2023, all the founders of ZestMoney resigned and a new leadership team was formed with Abhishek Sharma as the head of growth, Mandar Satupte as chief banking officer, and Mohit Chhajer as the vice-president of finance and financial operations (FinOps).
"This capital—combined with the unwavering commitment of our more than 150-strong team—enables us to successfully serve our consumers, merchants, and lender partners, while continuing to keep non-payment rates at under 2.5 percent in the largest and fastest-growing EMI market globally,” said Sharma, ZestMoney’s newly appointed CEO.
ZestMoney had in September 2022 raised $50 million from Australian BNPL fintech Zip Co. This is a part of a larger Series C fundraise which will see participation from existing investors like Goldman Sachs, Quona Capital, Xiaomi and Alteria Capital.
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