Tuesday, June 18, 2024

ZestMoney set to lay off around 100 employees after acquisition deal with PhonePe falls through

Weeks after an acquisition deal with PhonePe fell through, Bengaluru-based buy now pay later platform ZestMoney has announced layoff plans. According to reports, the fintech company will trim its workforce by around 20% as part of its business continuity and survival plan. According to reports, this will affect around 100 of the company’s employees.

PhonePe had put the deal to acquire ZestMoney on hold at the end of March this year amid due dilligence concerns. The deal amount had been pegged at $200 million to $300 million. 

ZestMoney had been founded in 2015 by Lizzie Chapman, Priya Sharma and Ashish Anantharaman. The Goldman Sachs-backed company has been battling a funding crunch in recent months and has previously been in acquisition talks with Pine Labs and BharatPe.

ALSO READ: PhonePe-ZestMoney deal pegged at $200mn-$300mn called off due to diligence concerns

The company had raised approximately $140 million from prominent investors such as PayU, Zip, Ribbit Capital, Quona Capital, Xiaomi, Omidyar Network, Goldman Sachs since its inception in 2015. ZestMoney raised its last funding round at $450 million valuation.

A Moneycontrol report anonymously quoting an employee said that the company had promised to pay a month’s salary as severance as well as providing insurance, mental health assistance and other benefits during this time. The company had about 450 employees and the layoffs will reportedly affect all departments.

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