ZestMoney
a prominent fintech start-up is set to close its operations by the end of this month,The company which had been facing challenges in recovering their business was dealt a significant blow when 2 major financial companies withdrew their credit lines due to regulatory restrictions imposed by the Reserve Bank of India (RBI) the withdrawal of these credit lines left ZestMoney without the necessary funding to sustain its operations
The regulatory restrictions on unsecured lending, which were implemented by the RBI in November, have had a profound impact on ZestMoney’s ability to function as a digital lending platform these restrictions were put in place to safeguard the interests of consumers and ensure responsible lending practices however they have inadvertently led to the downfall of ZestMoney and similar fintech companies that heavily relied on unsecured lending as part of their business models
Mandar Satpute, the recently appointed Chief Banking Officer of Zest-Money informed the tech team that they should start looking for new job opportunities as the company can only afford to pay salaries until the end of this month this unfortunate turn of events has left ZestMoney’s employees uncertain about their future and seeking alternative employments
Despite attempts by the management to salvage the situation by potentially selling the product and its customer base, the company finds itself without any ongoing business The failure of acquisition talks with fintech major PhonePe earlier this year further compounded of challenges PhonePe, backed by Walmart and valued at over $10 billion, had considered acquiring Zest Money in a deal estimated to be between $200-$300 million However after a thorough examination of thier operations, PhonePe decided against the acquisition due to undisclosed problems
The departure of Zest Money’s founders Lizzie Chapman, Priya Sharma and Ashish Anantharaman in May was a significant development in the company’s timeline this departure occurred just 2 months after the failed acquisition talks with PhonePe suggesting a lack of confidence in the company’s prospects with the closure of their operations the future of the founders as well as the employees remains uncertain.
In conclusion, ZestMoney’s decision to shut down its operations by the end of this month(December) is a direct result of the regulatory restrictions on unsecured lending imposed by the RBI. The withdrawal of credit lines by major financial companies further exacerbated the company’s financial woes. Despite attempts to sell the product and customer base finds itself without any ongoing business. The departure of its founders and failed acquisition talks with PhonePe have further contributed to the uncertainty surrounding the company’s future.
As the company prepares to cease operations and employees face the daunting task of finding new job opportunities particularly in a challenging job market where as finding a new job he’s a very difficult, especially in this Lay off period recently Spotify has lay off 1500 employees and some other companies also do same thing. However, it takes some time to get a job but definitely to get it
