ZestMoney-PhonePe deal called off over valuation
1 min read 30 Mar 2023, 01:35 PM ISTIn a townhall today, ZestMoney informed its employees that the deal has been called off
PremiumPhonePe has cancelled its plan to acquire buy-now-pay-later (BNPL) platform ZestMoney over disagreement on valuation.
In a townhall today, ZestMoney informed its employees that the deal has been called off, a person aware of the matter told Mint.
In November, Mint reported that the valuation at which PhonePe was buying ZestMoney was somewhere around $200-$300 million.
However, during the due diligence, the valuation went down to as low as $40-$50 million "due to which the acquisition was called off," the person added.
“During due diligence, PhonePe discovered that ZestMoney’s loan book was quite bad. Zest’s credit losses were 1.5x of their revenue numbers. Due to which, PhonePe was delaying and was willing to pay way lesser than what was expected…even less than what Zest has raised so far," he said.
ZestMoney raised its last funding round at a $450 million valuation. Till date, it has raised about $130 million.
ET was the first to report about the deal not happening.
The BNPL startup was looking for a buyer for at least a year now as it has struggled to raise funding. ZestMoney was earlier in acquisition talks with Pine Labs and BharatPe, but those deals also fell through.
This is a developing story…
