Lizzie Chapman, Priya Sharma and Ashish Anantharaman, founders of Bengaluru-based Indian fintech ZestMoney, have resigned from the company. They will, however, continue to be "significant" shareholders in the company.
The company will now be led by the company's VP of finance and FinOps Mohit Chhajer, chief banking officer Mandar Satpute and senior vice president for growth Abhishek Sharma.
Elaborating on this joint decision to quit the company, Chapman announced on LinkedIn, “Over the last few weeks, we have done a lot of thinking about the best path forward for ourselves given where the company is at. And whilst it has been very hard for us to arrive at this conclusion, we have decided that we will step back from our day-to-day operating roles with ZestMoney.”
The development came months after ZestMoney's acquisition talks failed with the Indian fintech decacorn PhonePe, as it would have given the digital payments platform inorganic access to a non-banking financial company (NBFC),
The latter had been in talks to acquire a majority stake in the the buy-now-pay-later (BNPL) fintech for $200 million to $300 million since last November. The Economic Times reported that PhonePe was offering $90 million in cash for ZestMoney, with the transaction also entailing taking on ZestMoney’s debt and a $10 million founder pay-out.
However, the deal did not go through as PhonePe raised concerns about due diligence and creditworthiness of the Goldman Sachs-backed fintech's loan book.
Last month, news about layoffs at the company started doing the rounds. It was reported that ZestMoney planned to retrench about 30 per cent of its workforce as part of its cost-tightening exercise.
Founded in 2015 by Chapman, Sharma and Anantharaman, ZestMoney's found its sweet spot during the pandemic, when it witnessed a 300 per cent surge in transactions. Its revenue also shot up to Rs 145 crore in the financial year (FY) 2022, up from Rs 89 crore in FY21.
Till date, the company has raised about $140 million from investors, including PayU, Zip, Ribbit Capital, Quona Capital, Xiaomi and Omidyar Network. However, like most other start-ups, it has been battling a funding winter in recent months,compounded by fears of global recession and financial slowdown. Its net loss surged to Rs 399.8 crore in FY22 from Rs 125.8 crore in FY21.
This prompted ZestMoney to reach out to other investors, including Pine Labs and BharatPe for acquisition talks, which did not materialise.
The big question that now faces the new management team is how they will keep ZestMoney afloat, and whether they will be able to ensure profitability that can help the BNPL start-up survive the funding winter.