ZestMoney, a BNPL startup backed by Goldman Sachs is set to shut down after failing to find a buyer, according to TechCrunch.
This development comes in the wake of the departure of ZestMoney’s founders earlier this year after acquisition discussions with FinTech giant PhonePe fell through.
The reins of the startup were passed on to three new leaders, who secured additional investment from existing backers in an attempt to chart a new course for the company. However, despite efforts to pivot, including engaging with various investors and FinTech entities, the path forward remained elusive.
ZestMoney once held a valuation of $445m and stood among a select few Indian startups employing alternative data for building credit profiles, enabling first-time online purchases. India’s limited credit card penetration left a substantial segment of the population without conventional credit scores, a gap ZestMoney aimed to address by leveraging alternative data points.
The country’s financial landscape, characterized by low credit card penetration, posed a challenge for conventional banks in evaluating creditworthiness for small loans. This situation encouraged startups like ZestMoney, Axio, and LazyPay to step in and cater to this underserved market, a space primarily dominated by financial behemoths like Bajaj Finance.
The Bengaluru-based startup had previously garnered significant attention from notable investors, including Goldman Sachs, PayU, Quona, Zip, Omidyar Network, and Ribbit Capital.
Keep up with all the latest FinTech news here
Copyright © 2023 FinTech Global
