Founders quitting, a failed acquisition bid, regulatory hurdles and a severe slowdown in the core BNPL business — ZestMoney has been on a downward spiral all year, which has now culminated in the startup shutting down.

The 8-year-old startup has crumbled from a valuation of $455 Mn and nearly 150 employees are now staring at an even more uncertain future.

Employees were informed about the impending shutdown at a town hall meeting on December 5, 2023, which left many perplexed, especially when the promotions were handed over twice to a majority of the staffers this year (in June and October).

Several of these employees told Inc42 that the surprise meeting was called to inform the employees to sit at home starting December 7, except for a few who would help pack up.

Although, as per our sources, there were no indications of operations shutting down until last month, the problems in the company had already been highlighted by the fact that ZestMoney’s cofounders Lizzie Chapman, Priya Sharma and Ashish Anantharaman stepped down from their respective roles in May, as the company battled for survival.

ZestMoney’s Last Ditch Attempts

Founded in 2015 by Chapman, Sharma and Anantharaman, ZestMoney raised more than $125 Mn in debt and equity funding since its inception. In its last funding round (in September 2021), the company raised $50 Mn at a valuation of $455 Mn. At the time, India was riding high on the BNPL wave, but a slew of regulatory changes since 2022 have impacted many players in this segment.

For the last two years, ZestMoney was in talks with PhonePe for an acquisition, which did not materialise and soon after the founders quit, even though they hold a combined stake of 18.5% in the company.

Close on the heels of the failed acquisition talks in May this year, the company said it would have new leaders at the helm to replace the outgoing founders — vice president of finance Mohit Chhajer, chief banking officer Mandar Satpute, and senior VP and head of growth Abhishek Sharma. It also claimed to........

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