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Unraveling the Turmoil: ZestMoney's Founders Exit

ZestMoney founders exit amid funding challenges as lending partners reduce exposure. Failed PhonePe acquisition and high bad debt contribute to the company's financial troubles.

Kashish Haswani
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The founders of ZestMoney, a buy-now-pay-later (BNPL) startup, have exited the company, and its lending partners have scaled back their exposure to the company. This has compounded the challenges for ZestMoney, which was already struggling to raise new funds in the current environment.

Lizzie Chapman, the now-former CEO of ZestMoney, along with Priya Sharma (CFO & COO) and Ashish Anantharaman (CTO), announced their departures on Monday in a heartfelt letter to the employees. 

"We have done a lot of introspection over the past few weeks, and it's been tough for us to reach this decision," Chapman wrote in the email.


The exit of the founders comes at a time when ZestMoney is facing a number of challenges. The company is struggling to raise new funds, and its lending partners have scaled back their exposure to the company. This has led to a slowdown in ZestMoney's growth.

PhonePe Acquisition: Terms and Fallout

In November 2022, ZestMoney was in talks to be acquired by PhonePe, a digital payments company. The deal was reportedly worth $200-300 million. However, the deal fell through in March 2023 due to concerns about ZestMoney's financial health.

The collapse of the PhonePe deal was a major setback for ZestMoney. The deal would have provided ZestMoney with much-needed capital and resources, and it would have given the company access to PhonePe's large customer base.

Missteps that Led to ZestMoney's Setbacks

There are a number of factors that contributed to ZestMoney's financial problems. One factor was the company's business model. ZestMoney makes money by charging interest on the loans it provides to customers. However, the interest rates on these loans are high, and many customers are unable to repay them. This has led to a high level of bad debt for ZestMoney.

Another factor that contributed to ZestMoney's problems was the RBI's regulations for BNPL companies. In 2022, the RBI imposed new regulations on BNPL companies, which made it more difficult for them to operate. These regulations included a requirement for BNPL companies to hold more capital and to conduct more due diligence on their customers.

BNPL Startups: Struggling in an Evolving Landscape

ZestMoney is not the only BNPL startup that is struggling. In recent months, a number of BNPL startups have announced layoffs and funding cuts. This is due to a number of factors, including the rising cost of living, the economic slowdown, and the RBI's regulations.

The rising cost of living is making it more difficult for people to afford BNPL loans. The economic slowdown is also leading to job losses, which is making it more difficult for people to repay their BNPL loans. The RBI's regulations are making it more difficult for BNPL companies to operate, which is leading to higher costs and lower profits.

The Future of ZestMoney and Its Founders

It is unclear what the future holds for ZestMoney. The company is now trying to raise new funds, but it is unclear if it will be successful. If ZestMoney is unable to raise new funds, it may be forced to shut down.

The founders of ZestMoney have also left the company. It is unclear what they will do next. However, it is possible that they will start a new BNPL company or that they will join another BNPL company.


The problems at ZestMoney are a sign of the challenges facing the BNPL industry. The industry is growing rapidly, but it is also facing a number of challenges, including rising costs, the economic slowdown, and the RBI's regulations. It remains to be seen how the BNPL industry will weather these challenges.


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