PhonePe Zestmoney deal update today, PhonePe hold acquisition

PhonePe Zestmoney deal update today: ZestMoney, a Bengaluru-based BNPL (buy now pay later) platform, is facing funding challenges as venture capitalists and investors have become increasingly cautious in their investments.

Despite raising around $140 million from prominent investors such as PayU, Zip, Ribbit Capital, Quona Capital, Xiaomi, Omidyar Network, and Goldman Sachs, ZestMoney has been unable to raise the funds it needs.

PhonePe Zestmoney deal update today, PhonePe hold acquisition

In its quest for a buyer, ZestMoney has held acquisition talks with Pine Labs and BharatPe in the past, but both deals eventually fell through. The situation took a turn for the worse when PhonePe, one of India's leading fintech platforms, decided to pause its acquisition of ZestMoney, a deal worth an estimated $200 million-$300 million.

PhonePe called off the acquisition due to concerns over due diligence, despite several months of discussions with the BNPL startup. The company's board and investors were informed of the decision in recent days.

The acquisition would have been significant for PhonePe, which is owned by Walmart, as it would have allowed the company to obtain a non-banking finance company (NBFC) license, something it has been seeking for a while. However, PhonePe's decision has come as a setback for ZestMoney, which is struggling to raise funds.

During the financial year 2022, ZestMoney's revenue increased from ₹89 crores to ₹145 crores. However, the company's losses also surged from ₹125.8 crores to ₹398.8 crores, indicating the scale of its funding challenges.

Published by: Global News Land Updated: Mar 31, 2023, 4:29pm

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