In a town hall held on Monday, ZestMoney’s founders— Chapman, Priya Sharma and Ashish Ananthataman— informed employees that they would be stepping away from their operating roles and support the transition to a new management over the next four months.
The founders will continue as shareholders in Primrose Hill Ventures, the corporate entity controlling ZestMoney, where they collectively own around 18.5%, as per Tracxn data.
“As we go on to the next chapters of our own journeys, we are confidently passing the baton to Mohit Chhajer, Mandar Satpute and Abhishek Sharma to lead the company into the future. They have all been with us on the journey for a long time, having helped build and scale the company to be the largest digital lending franchise in the country,” Chapman said in her Linkedin post.
Chapman also revealed that close to 175 employees would continue on to rebuild the startup, as others move on from the company. Zestmoney has been in a downward spiral since Walmart-backed digital payments major PhonePe backed out of talks to acquire the company. With the deal falling through, ZestMoney laid off more than 100 employees out of its 450-member team. A significant chunk of the staff also moved to PhonePe, which is looking to build its lending business from scratch.
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On Monday, PhonePe cofounder and CEO Sameer Nigam said on micro-blogging website Twitter that the company had taken a copy of the technology IP (intellectual property) of ZestMoney’s loan servicing platform and hired around 130 of its employees. However, he clarified that PhonePe is neither looking to hire more employees from ZestMoney nor intends to acquire its lending business or bad assets.
“The tech IP copy was purchased with the company’s founders, board and investors’s consent. The employees were hired with ZestMoney’s consent since they had to downsize. We wish ZestMoney a bright future and are rooting for them to turn things around,” said Nigam in a series of tweets.
ET first reported on March 30 that PhonePe had walked out from acquiring ZestMoney after its six-month-long due diligence raised red flags, dealing a big blow to the buy-now-pay-later (BNPL) company.
Founded in 2015, the Bangalore-based ZestMoney began life as a loan sourcing platform to enable quick disbursal of credit at the point of sale, mainly focussing on online merchants.
ZestMoney works with ecommerce majors Flipkart, Amazon, Myntra and Nykaa to offer pay-later as a product. It has built credit partnerships with multiple lenders, including Aditya Birla Finance, Tata Capital and Hero Fincorp. It acquired Nahar Credits, a Chennai-headquartered non-banking finance company (NBFC), to start doling out loans from its own books, while continuing with the lender partnerships.
ET had exclusively reported on April 26 that the company had decided to change its business model from being a lender to now offering a white-label solution to other fintech lenders or NBFCs for their credit businesses.
This comes even as the company looks for a buyer for its NBFC arm, Nahar Credits.