Prosus Writes off $38 Million Investment in Fintech Firm ZestMoney

• ByStartupStory     |    June 28, 2023

Global investment group Prosus N.V. has announced a write-off of its $38 million investment in troubled fintech firm ZestMoney, reducing its fair value to nil, according to its annual report for FY23. Prosus, which has backed several Indian tech startups, stated that it has “lost significant influence during the current year” in regards to its investment in ZestMoney.

In 2021, Prosus held an effective stake of approximately 19.44% in Primrose Hill Ventures Pvt., the holding company for ZestMoney. However, the annual reports for the following years do not disclose the stake held by Prosus. ZestMoney, backed by Goldman Sachs, encountered difficulties when PhonePe canceled its acquisition deal after the fintech firm failed to meet due diligence standards.

In April, ZestMoney implemented a business continuity and survival plan, resulting in the layoff of around 20% of its workforce, amounting to 100 employees.

Adding to the company’s challenges, in May, all three co-founders and key executives at ZestMoney stepped down from their daily duties at the startup, further exacerbating the uncertain situation. Prosus’s annual report also revealed a decrease in the value of its investments in Byju’s and shared data on Swiggy’s losses for 2022.

The write-off of the investment in ZestMoney reflects the difficulties the fintech firm has faced in recent times. The cancellation of the acquisition deal with PhonePe, followed by layoffs and the departure of key executives, has put ZestMoney’s future prospects into question. Prosus’s decision to virtually write off its investment signals a significant loss of confidence in the fintech firm’s ability to regain stability and grow.

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