ZestMoney’s failed buyout is the last nail in BNPL coffin
The concerns flagged by PhonePe owner Walmart for not going ahead with the acquisition are emblematic of all that’s wrong with the buy now pay later business in India.
Why read this story?
Editor's note: ZestMoney’s distress sale to PhonePe is off, The Economic Times reported last week. The reason: PhonePe’s owner, Walmart, decided against the deal after the Bengaluru-based buy now pay later startup failed to pass its due diligence test. This undoubtedly puts ZestMoney, one of the pioneers of India’s online buy now pay later industry, in serious trouble. According to media reports, the company is now preparing for layoffs across departments as it is on the verge of running out of funds with no other prospective buyer in sight. The unravelling of ZestMoney’s operations over the last year and its subsequent failure to close a deal with PhonePe, in my opinion, marks the final nail in the coffin of BNPL in India. Before I elaborate on this, let’s take a quick look at the circumstances in which the high-profile deal between the two well-known fintech startups collapsed. Several industry executives tell me ZestMoney started talks with PhonePe for an acquisition in November. It was a distress sale that was prompted largely on the back of two major events: The near collapse of …
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