ZestMoney CEO Lizzie Chapman resigns weeks after PhonePe deal setback

ZestMoney, a digital lending platform, is grappling with uncertainty following the resignation of all three of its founders. This comes two months after a planned acquisition by PhonePe, a Walmart subsidiary, failed to materialise.

Lizzie Chapman, the now-former CEO of ZestMoney, along with Priya Sharma (CFO & COO), and Ashish Anantharaman (CTO), announced their departures on Monday in a heartfelt letter to the employees. 

"We have done a lot of introspection over the past few weeks, and it's been tough for us to reach this decision," Chapman wrote in the email.

ZestMoney, which once boasted a 500-strong workforce, is now left with roughly 100 employees. Since the failed deal in March, approximately 170 ZestMoney workers have migrated to PhonePe.

The Bangalore-based company, founded in 2015, was a pioneer in the Buy Now, Pay Later sector, providing customers instant digital loans facilitated by Nahar Credit, a non-banking financial company (NBFC) acquired by ZestMoney in 2019.

Negotiations between PhonePe and ZestMoney commenced in November 2022, with initial reports suggesting that PhonePe was set to acquire ZestMoney for an estimated $200-$300 million. Such a deal would have allowed PhonePe to gain a foothold in the NBFC sector, a prospect appealing to many fintech companies.

However, the acquisition was abruptly abandoned in March over concerns about ZestMoney's loan quality.

Several NBFCs reportedly have exposure to ZestMoney's loan portfolio. Despite this, the fintech startup has managed to raise roughly $140 million from top-tier investors, including PayU, Zip, Ribbit Capital, Quona Capital, Xiaomi, Omidyar Network, Goldman Sachs, among others. ZestMoney saw its revenue increase to ₹145 crore in the fiscal year 2022, up from ₹89 crore in FY21, though its losses also surged to ₹398.8 crore from ₹125.8 crore a year earlier.

In her farewell email, Chapman underscored the founders' commitment to the company and their belief in its potential, promising to provide full support to the new management team for a smooth transition over the next four months. "We started ZestMoney almost eight years ago with a dream of making life affordable for millions of Indians," she wrote. "We're immensely proud of our incredible team and the unique culture we've built at ZestMoney."

Despite stepping down from their leadership roles, Chapman, Sharma, and Anantharaman will remain significant shareholders in the company.

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