ZestMoney Secures $5-7M Funding Round from Prominent Investors Amidst Challenges
- ByStartupStory | July 4, 2023
ZestMoney, a fintech start-up, has successfully secured a funding round of $5 million to $7 million from a group of prominent investors. Quona Capital, Zip, Omidyar Network India, Flourish VC, and Scarlet Digital are among the investors who participated in this round. The funding comes at a crucial time for ZestMoney, following recent setbacks, including PayU’s write-off of its investment in the company and Prosus NV’s virtual write-off in its FY23 annual report.
The challenges faced by ZestMoney include a failed acquisition deal with PhonePe and the departure of its three co-founders and top executives. In an effort to retain key employees and maintain motivation, the company has offered a salary increase of 15-20% to select individuals. With this fresh funding, ZestMoney aims to overcome these obstacles and turn its business around.
ZestMoney’s primary business model revolves around providing loans to customers with limited or poor credit history. Through strategic partnerships with merchants, the company offers financing options to customers at the point of sale. The latest funding infusion will enable ZestMoney to continue providing these financing options and expand its operations.
In response to the unsuccessful acquisition deal with PhonePe and the subsequent resignations of co-founders and top executives, ZestMoney has assembled a new leadership team to steer the company in a new direction. The salary increase offered to key employees is an initiative to keep them engaged and motivated during the company’s turnaround process.
This funding round follows the write-off of investments by PayU and Prosus NV. PayU, which held a 15% stake valued at $38 million in FY23, and Prosus NV, as stated in their FY23 annual report, have both written off their investments. The additional funding secured by ZestMoney will play a vital role in supporting the company’s ability to offer financing options to customers and expand its business operations.
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