ZestMoney founders call it quits 2 months after PhonePe deal falls through

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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 buy now pay later (BNPL) platform, raising concerns about the cash-strapped company’s survival.

Chapman was the Chief Executive Officer, while Sharma served as the firm’s Chief Operating Officer and Anantharaman was the Chief Technology Officer. Champan told employees in a Slack post about their resignation, according to a person with direct knowledge of the matter.

"Over the last few weeks, we have done a lot of thinking and it has been hard for us to arrive at this conclusion. We have decided to step down from our roles as CEO (Lizzie), CFO & COO (Priya), and CTO (Ashish) at ZestMoney," the founders said in the post.

The founders will continue to be shareholders of ZestMoney.

"Myself (Chapman), Priya and Ashish will continue to be significant shareholders in the company and therefore we will continue to be the biggest cheerleaders and supporters in every way," the Slack post addressed to employees said.

"The new management team who will step up at this time and we will do absolutely everything we can to support them and you, both over the next 4 months as we transition, and over the longer term," Chapman wrote in the Slack post.

ZestMoney declined to comment.

PhonePe's cofounder and CEO Sameer Nigam said that the company has hired some ZestMoney employees and purchased the company's tech Intellectual Property (IP) copy.

"The Tech IP copy was purchased with the company's founders, board, and investors' consent. The employees were hired with ZestMoney's consent since they had to downsize...We wish ZestMoney a bright future and are rooting for them to turn things around," Nigam wrote on Twitter after the resignation announcement.

In November 2022, PhonePe was in talks to acquire lending platform ZestMoney, a move that would have marked the Unified Payments Interface (UPI) leader's foray into digital lending. As per reports, the deal size was pegged at around $200-$300 million. But in March, the Walmart-backed fintech decacorn walked away from the deal citing issues with due diligence, leaving ZestMoney in chaos.

ZestMoney had also laid off around 20 percent of its workforce or 100 employees as the business was working on a business continuity plan.