ZestMoney’s Final Chapter: Digital Lending Pioneer to Shut Down Operations

• ZestMoney, once a prominent name in India’s Buy Now, Pay Later (BNPL) sector, is officially ceasing operations by the end of December 2024.
• Founded in 2016, ZestMoney had gained over 17 million customers and established partnerships with 27 lenders, offering services across 75,000 offline stores and 10,000 online brands.
• The startup had previously attracted investments exceeding $130 million from top venture capital firms, including Prosus and Ribbit Capital.
• ZestMoney’s downfall began with mounting losses, including a staggering ₹398 crore in FY22, and the collapse of an acquisition deal with PhonePe earlier this year.
• Challenges such as regulatory hurdles in the BNPL space, loan defaults, and an inability to secure additional funding sealed its fate.
• Employees have been left in uncertainty, though the company promises two months of severance and outplacement support to the 150 affected staff members.

This closure highlights the precarious nature of fintech startups amid India’s evolving regulatory landscape, with ZestMoney’s story serving as a cautionary tale for the BNPL sector.