ZestMoney has been undergoing a rough patch as the Buy-Now-Pay-Later sector is witnessing an overall decline in demand
Walmart-backed PhonePe may acquire buy-now-pay-later (BNPL) platform ZestMoney in the coming time, an Economic Times report pointed out.
The Bengaluru-based Indian start-up ZestMoney is undergoing a rough patch as the BNPL sector is witnessing an overall squeeze in consumer spending. The company has been reportedly looking for a potential buyer for the past two months due to the shortage of fresh funds.
People aware of the development told The Economic Times that is likely to be a distress sale, with the fintech being valued much lower than its previous financing last year. In 2021, ZestMoney's valuation was around $400 million. Last September, it also bagged a $50 million investment from Australian company Zip.
“The talks are fairly serious and likely to close in a few weeks, negotiations are on about the price, keeping in mind the extremely cautious state of the markets, especially in the fintech space...” a person close to the deal told The Economic Times.
However, PhonePe did not disclose anything about the possible deal. A ZestMoney spokesperson claimed that the entire issue is speculative.
If the acquisition takes place, it would signal one of the biggest consolidations in the Indian lending sector.
E-commerce firm Flipkart-owned fintech firm PhonePe recently raised Rs 742 crore from its parent company through the issue of 3,71,753 shares. Prior to this, it also raised $297 million in March 2022.
Founded by Sasha Mirchandani in 2012, Kae Capital is known for investing in start-ups looking for pre-seed to pre-Series A funding
In October 2022, the company raised $120 million through convertible notes from its existing shareholders
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