The resignations come two months after PhonePe’s bid to acquire ZestMoney fell through
ZestMoney's tech assets and bad loans are in the process of being transferred to the digital payments platform PhonePe
Sources also told Inc42 that the digital payments platform was looking at absorbing some of ZestMoney’s employees, adding that around 150 employees have already jumped ship to PhonePe so far
Fintech startup ZestMoney has been thrusted into uncharted waters as the three cofounders and the top executives of the digital lending platform — Lizzie Chapman, Priya Sharma and Ashish Anantharaman, have resigned from the company on Monday (May 15).
“Over the last few weeks, we have done a lot of thinking and it has been hard for us to arrive at this conclusion. We have decided to step down from our roles as CEO (Chapman), CFO and COO (Sharma), and CTO (Anantharaman) at ZestMoney,” said Chapman in an internal mail to employees.
This comes a couple of months after an acquisition bid by PhonePe failed to materialise as a funding crunch bit into the lendingtech startup’s fortunes. Last year, PhonePe was looking to acquire ZestMoney for a consideration of $200 Mn – $300 Mn but shelved the plans over the quality of ZestMoney’s loan book.
Sources told Inc42 that PhonePe has taken over ZestMoney’s tech assets and bad loans in lieu of $18 Mn line of credit that the digital payments company extended to the troubled lendingtech startup previously. The move was taken a few weeks after reports emerged that PhonePe had written off the loan late last month.
Apart from the tech stack, ZestMoney’s underwriting code has also been transferred to the digital payments giant.
However, in a tweet, PhonePe founder Sameer Nigam said that PhonePe has not taken over any of ZestMoney’s tech assets, intellectual property, clients, business or NPAs, or its NBFCs.
The digital payments platform had already absorbed most of ZestMoney’s employees (around 100), barring 8-9 employees who were still on the rolls of the lending platform, Inc42 source added.
While affirming that it ‘separately’ hired 130 employees from ZestMoney, Nigam added that the digital payments company does not plan on hiring any more from the troubled startup.
“We bought a copy of their LSP tech IP & separately hired ~130 ZM employees,” he said in a tweet.
Meanwhile, the founders said that they will offer all support to the incoming management team over the next four months to ensure a smooth transition. The resignations of the top brass have left close to 100 current employees in the lurch, with no idea about the company’s future.
Founded in 2015, Bengaluru-based ZestMoney offered BNPL services, allowing its users to pay their shopping bills in three instalments at 0% interest rate. Post the PhonePe acquisition failure, it was widely reported that the lending platform would pivot towards a lending SaaS play, under which PhonePe would pay the Lizzie Chapman-led startup an additional $8 Mn in licencing fee to use the latter’s tech stack.
But since then, matters seem to have suddenly taken a turn for the worse as the entire top brass seems to have resigned enmasse and without any clarity about its near future.
With inputs from Bismah Malik