India’s PhonePe calls off acquisition of BNPL firm ZestMoney
Indian payments giant PhonePe has reportedly called off its proposed acquisition of buy now, pay later (BNPL) firm ZestMoney, according to The Economic Times.
PhonePe reportedly calls off ZestMoney acquisition
The Walmart-backed payments app had opened talks to acquire ZestMoney for around $200 million to $300 million in November last year. However, The Economic Times reports the firm has now decided to walk away from the deal after carrying out its due diligence checks, with sources suggesting concerns over ZestMoney’s business model and debt liability.
Other reasons cited by sources include the tough market environment, disagreement over valuation and India’s increasing scrutiny of digital lending companies.
Founded in 2015, ZestMoney offers BNPL services to Indian customers, allowing them to make purchases and repay in three or more installments. ZestMoney claims a network of over 10,000 online and 75,000 offline stores, and more than 17 million registered users.
The BNPL fintech had last raised funds at a valuation of $450 million, but has reportedly been finding it difficult to raise new capital.
Meanwhile, PhonePe recently secured an additional $200 million from Walmart as part of an ongoing fundraise of up to $1 billion in capital. The new tranche brings the total capital raised in the round so far to $650 million following a $100 million raise from Ribbit Capital, Tiger Global and TVS Capital Funds in February and a $350 million raise from General Atlantic in January.
