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ZestMoney to shut down after raising Rs 1,000 crore; 150 employees to become jobless

Jaya Vishwakarma
New Update
zestmoney founding team

ZestMoney Co-founders resigned in May 2023

Bengaluru-based buy-now-pay-later (BNPL) startup ZestMoney is shutting down its operations after failing to recover from financial struggles and unsuccessful attempts to revive the business.

The startup, which was once valued at over $400 million, made the announcement on December 5, 2023, marking a significant downturn in its fortunes, Moneycontrol reported.

Management and acquisition woes

ZestMoney's troubles began to surface following the departure of its founding team in May 2023 which included CEO Lizzie Chapman, Priya Sharma CFO & COO, and CTO Ashish Anantharaman.


“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," CEO Lizzie Chapman earlier told in an email to employees.

Following this, the new management, backed by investors, was appointed; however, it failed to steer the company back to profitability, a challenge still faced by many elite startups. A critical blow came when UPI payments giant PhonePe withdrew from acquisition talks due to concerns about ZestMoney's financial health, leaving the startup in a precarious position. This also led to the layoff of about 100 employees, or approximately 20% of its workforce at the time.

Failed turnaround efforts

In an attempt to salvage the situation, ZestMoney launched a revival plan named "ZestMoney 2.0" or "ZeMo 2.0." However, this initiative did not yield the desired results, leading to further instability. The plan's failure signaled the inability of the company to adapt to the rapidly changing fintech landscape.

What will be the impact on employees?

The report added that the closure of ZestMoney's operations will lead to the layoff of the remaining 150 employees, although they have been promised two months of severance pay and support for finding new employment.

The development seems surprising given that, at its peak, ZestMoney had a vast operational scale, with a customer base of 17 million and partnerships across thousands of brands and stores.

The role of regulatory challenges 

A significant factor in ZestMoney's downfall was the regulatory changes by the Reserve Bank of India (RBI), which affected the entire BNPL sector. These regulations restricted non-bank institutions from certain financial activities, impacting ZestMoney's business model.

Scarlet Capital, Zip, Flourish Ventures, Quona Capital, Omidyar Network India, Alteria Capital, Goldman Sachs are some of ZestMoney backers.

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