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 * News




PHONEPE TO ACQUIRE ZESTMONEY IN $200M-$300M DEAL: SOURCE

By Aparajita Saxena
November 25, 2022, Updated on : Sat Nov 26 2022 10:20:45 GMT+0000


A source close to the talks said the deal will close in two to three weeks, and
was in the final stages of completion.
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PhonePe is in the final stages of acquiring BNPL player ZestMoney for $200
million to $300 million, a source close to the talks told YourStory.




The buy-now-pay-later startup was last valued at $470 million after its latest
funding round when it raised $70 million in its Series C in September last year.




BNPL companies such as ZestMoney and its peers LazyPay, Uni Cards, Slice,
etc., have been grappling with a lot of uncertainty ever since the Reserve Bank
of India (RBI) released guidelines around digital lending, essentially making it
hard for fintech startups to extend personal credit lines via a card. While
ZestMoney has been lending at checkout points, without a card, stringent
guidelines have still affected the industry.

Get connected to PhonePe




For PhonePe, ZestMoney gives it instant access to a readymade consumer credit
base. It bolsters PhonePe's lending play--a space its rival, Paytm, has already
cracked quite well.




The PhonePe-ZestMoney deal was first reported by The Economic Times.




The deal is expected to close in two to three weeks, the source said, adding it
was "almost as good as done."

(Design credit: Nihar Apte)

1104 people loved this story

--------------------------------------------------------------------------------

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ZestMoney will continue to function as a separate entity, under its own brand
name, once the acquisition is completed, the source said.




People familiar with the development said ZestMoney could hit EBITDA
profitability by the end of the calendar year, which may have sweetened the deal
for PhonePe.

Get connected to PhonePe




ZestMoney said the talks were "speculative", while PhonePe declined to comment
on the deal.




PhonePe has been eying major acquisitions in the sector to boost its financial
and tech platform play, as well as bolster its “super app” plans. The company
has made seven acquisitions to date, including OSLabs, Zopper Retail,
WealthDesk, and OpenQ. ZestMoney's will be PhonePe's most expensive acquisition
yet.




Founded in 2015 by Priya Sharma, Ashish Anantharaman, and Lizzie Chapman,
ZestMoney offers BNPL plans of ticket sizes Rs 50 to Rs 5 lakh payable over 30
days to 24 months. It has partnered with 25 banks and non-banking lenders, and
works with large merchants such as Amazon, Flipkart, Google Pay, Apple, and
Xiaomi to offer its BNPL services to customers.




In June, YourStory reported that ZestMoney had raised Rs 20 crore in debt by
issuing non-convertible debentures (NCDs) through private placement to its
existing investor Alteria Capital.

1500 people loved this story

--------------------------------------------------------------------------------

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YourStory had earlier this week reported that Flipkart-owned digital payments
platform PhonePe had received a fresh capital infusion of about Rs 742 crore
from its Singapore-based parent, even as it reported a wider consolidated loss
for the 2021-22 financial year.




This is the second major capital raise by the company from its parent this year.
In March, the fintech company passed two separate resolutions to allot a total
of 2.5 million equity shares to PhonePe Pvt. Ltd, Singapore, to raise $297
million (Rs 2,275 crore).




PhonePe also recently moved its headquarters from Singapore to India to bolster
its position, and prepare for its initial public offering.

Get connected to PhonePe

--------------------------------------------------------------------------------

Edited by Megha Reddy



 * Just In
 * PhonePe
 * zestmoney
 * flipkart acquired phonepe
 * fintech
 * Financial technology
 * BNPL


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