ZestMoney weighs layoffs as deal with PhonePe falls through

ZestMoney is watching more than one layoffs and its founders are in search of outplacements for the impacted personnel an afternoon after Walmart-subsidized PhonePe determined to show its lower back at the purchase-now-pay-later (BNPL) platform, leaving the organization in distress, reassets advised Moneycontrol on March 31.

Founders of the Goldman Sachs-subsidized ZestMoney, which has approximately 450 personnel, held a townhall on March 30 night and knowledgeable personnel approximately layoffs throughout departments, the reassets stated. The information of PhonePe deal falling via broke in advance withinside the day.

"The organization has to paintings on a enterprise continuity plan or a survival plan and layoffs can be part of it. The personnel throughout the enterprise can be affected because of this. However the importance of the effect isn't always clean yet," stated one of the reassets on circumstance of anonymity.

On March 31, Priya Sharma, co-founding father of the BNPL platform, additionally despatched out a message to 3 startups in search of assist for outplacing ZestMoney personnel.

“Hi All - I am Priya (Co-founder, ZestMoney), with out entering into specifics as we aren't commenting into what's being written approximately, I would really like to attain out to the organization to invite for assist with outplacements for our teams,” she stated withinside the message. Moneycontrol has reviewed a duplicate of the message.

Seeking Loan for survival

PhonePe gave a mortgage of approximately $18 million to ZestMoney whilst the organization turned into comparing the acquisition. According to one of the reassets, PhonePe may increase a comparable mortgage to the BNPL platform to assist the organization tide over the instantaneously liquidity crisis.

PhonePe and ZestMoney declined to remark for the story.

PhonePe Acquisition Deal Cancelled

In November 2022, PhonePe turned into in talks to collect lending platform ZestMoney, a flow that could have marked the Unified Payments Interface (UPI) leader`s foray into virtual lending. As in step with reports, the deal length turned into pegged at around $200-$three hundred million.

The Buy Now Pay Later enterprise confronted regulatory hurdles in 2022 whilst the Reserve Bank of India issued a notification forbidding running non-financial institution establishments or fintech companies, inclusive of a lot of the 'purchase now, pay later" services, from loading credit score strains onto Prepaid Payment Instruments (PPI) along with wallets and pay as you go cards.

Top BNPL gamers inclusive of LazyPaytemporarily stopped guide for its BNPL charge product LazyPlus UPI.

US-primarily based totally BNPL company Sezzle additionally close down its India operations from April nine as a part of a restructuring workout in keeping with its figure organization.

ZestMoney were seeking out a purchaser for extra than 8 months now because it struggled to elevate funds, reassets stated.