Prosus Writes Off $38 Mn Investment In ZestMoney

The Netherlands-based investment firm Prosus NV has written off its investment in the beleaguered Indian fintech startup ZestMoney.

Prosus, which backs several Indian startups including PharmEasy, BYJU’S, PayU, Swiggy, Eruditus, Mensa Brands and so on, has virtually written off its investment in its FY23 annual report, stating that it has lost ‘significant influence’ during the year.

While the investment major held a 19.44% stake in Primrose Hill Ventures, the holding company for ZestMoney, it did not mention the stake it held in 2022 or 2023 in its annual reports for the period. Prosus has marked its investment in Primrose Hill (ZestMoney) to zero as against $38 Mn in FY22.

ZestMoney started facing trouble a few months ago after fintech decacorn PhonePe walked out from an acquisition deal, citing valuation and due diligence issues. 

Post the failed acquisition, the consumer lending startup fired between 20-30% of its staff. At the time, sources told Inc42 that around a third of ZestMoney’s workforce was hired by PhonePe, while the rest third was retained.

Around a month after the layoffs, the company’s founders – Lizzie Chapman, Priya Sharma and Ashish Anantharaman – stepped away. 

At the time, sources told Inc42 that PhonePe took over ZestMoney’s tech assets and bad loans for an $18 Mn line of credit that the digital payments company had extended to the troubled lendingtech startup.

After the founders stepped down, Mohit Chhajer, Mandar Satpute and Abhishek Sharma took over the leadership at ZestMoney. Chhajer currently works as VP of Finance and FinOps at ZestMoney, while Satpute currently holds the position of chief banking officer at the fintech startup. Sharma is working as SVP of growth at the startup.

The troubled fintech startup is working on finalising a funding round from its existing investors, including Quona Capital, Omidyar India, Flourish VC and Scarlet Digital.

Meanwhile, Prosus also slashed edtech giant BYJU’S valuation. The investment giant has invested $536 Mn in BYJU’S since 2018 and holds a 9.6% stake in the edtech startup. In its FY23 annual report, Prosus pegged the fair value of its stake in the company at $493 Mn, which translates to a valuation of $5.1 Bn for BYJU’S.

At the same time, it also released financials for foodtech giant Swiggy. The foodtech’s loss jumped to $545 Mn in 2022 from $300 Mn in 2021, according to Prosus’ annual report.