PhonePe has abandoned its planned acquisition of ZestMoney due to valuation and due diligence issues.

PhonePe has abandoned its planned acquisition of ZestMoney due to valuation and due diligence issues.

The company’s board of directors and investors have been informed that PhonePe is not proceeding with the acquisition after months of due diligence, and is looking for a buyer as it struggles to raise new funding from investors.

Fintech most important PhonePe has reportedly cancelled its plan to gather buy-now-pay-later (BNPL) platform, ZestMoney.

The corporation forums and traders had been knowledgeable that PhonePe isn’t always going in advance with the purchase after months of due diligence, ET reported.

Lack of due diligence, disagreements over valuation, business sustainability and ZestMoney’s shareholder structure were the main reasons for abandoning the deal.

Questions have also been raised about the role of parent company Primrose Hill Ventures, the Singaporean parent company of India-registered Camden Town Technologies, which owns and operates the ZestMoney platform.

BNPL’s startup ZestMoney said he expected a valuation of $200-300 million for the acquisition.

Bangalore-based ZestMoney, founded in 2015 by Lizzie Chapman, Priya Sharma and Ashish Anantharaman, offers a BNPL service that allows users to pay their grocery bills in three installments at 0% interest doing.

In his BNPL area of ​​the country, he competes with companies such as Simpl, LazyPay and ePayLater.

In 2021, ZestMoney raised $50 million in a Series C round led by Zip Co Limited, a publicly traded Australian fintech company. The startup is also backed by Quona Capital, Reinventure Ribbit Capital, Omidyar Network, PayU and Xiaomi.

However, the BNPL platform was looking for a buyer as it struggled to raise new capital from investors.

Last year, PhonePe began negotiations to acquire ZestMoney, which he has to strengthen its lending services. It was initially reported that the deal would be completed quickly. If his acquisition of ZestMoney by PhonePe comes to fruition, it would be the largest consolidation deal in the fintech lending segment. The loss of

ZestMoney increased to 398.8 Cr year-on-year (YoY) for the year ended 31 March 2022. This is because expenses have jumped threefold. Fintech startup losses jumped 216% from reported INR 125.8 Cr in fiscal year 2020-21 (FY21).


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