Amid the regulatory uncertainties and unsuccessful attempts to revitalise its business, ZestMoney is set to cease operations. The choice to cease operations follows the departure of the founders several months ago, transferring control of ZestMoney to investors and a fresh management team.
ZestMoney is an online platform enabling users to make purchases through EMI options, even without a credit card.
The management conveyed the decision during a townhall meeting on Tuesday, 5, December 2023 that they will be winding up operations, leading to the unfortunate termination of 150 employees. To facilitate the process, the company will consuly a legal and finance team.
The startup acknowledged that its revival strategy, labelled ‘ZestMoney 2.0’ or ‘ZeMo 2.0,’ faced challenges and couldn’t be implemented successfully. As per media reports, the company has committed to providing two months’ pay as severance along with outplacement assistance to the employees affected by the layoffs.
The platform also let go of 100 employees in November 2022, after a failed acquisition deal. The UPI service provider PhonePe was engaged in discussions regarding the acquisition of ZestMoney. However, the plan was abandoned due to a disagreement over valuation.
In 2022, the Reserve Bank of India imposed restrictions on non-banking institutions and fintech companies, including various ‘buy now, pay later’ services, preventing them from loading credit lines into prepaid payment instruments such as wallets and prepaid cards.
Established in 2016 by Lizzie Chapman, Priya Sharma and Ashish Anantharaman, the company boasted a customer base of 17 million. It facilitated monthly loan disbursals amounting to Rs 400 crore, maintaining partnerships with 27 lending institutions and affiliations with 10,000 online brands and 75,000 offline stores.