Bangalore-based fintech startup, ZestMoney, has announced that it will be laying off 100 employees due to the breakdown of a deal with digital payments platform, PhonePe. The deal would have allowed PhonePe users to access ZestMoney’s services, including a digital credit line, for online purchases.
The layoffs, which account for about 15% of ZestMoney’s total workforce, come as a result of the company’s failure to secure a partnership agreement with PhonePe. The deal would have been a significant win for ZestMoney, which has been expanding its services in the Indian e-commerce market.
The company’s CEO, Lizzie Chapman, released a statement on the matter, saying, “We deeply regret having to let go of some of our colleagues who have worked tirelessly to build our business. Unfortunately, the deal with PhonePe was a key part of our growth strategy, and its collapse has forced us to make some difficult decisions.”
Chapman went on to express her optimism for the future of the company, stating that ZestMoney remains committed to its mission of making digital credit more accessible to Indian consumers. She added that the company is actively seeking out new partnerships and growth opportunities.
The layoffs at ZestMoney come at a time of uncertainty for many Indian startups, as the country’s economy continues to face challenges from the ongoing COVID-19 pandemic. Many startups have been forced to cut costs and streamline their operations in order to weather the economic downturn.
ZestMoney, which was founded in 2015, has raised over $42 million in funding from investors including Ribbit Capital, Xiaomi, and PayU. The company provides a digital credit line that allows consumers to make purchases online without the need for a credit card.
The startup has also partnered with a number of e-commerce platforms, including Flipkart, Amazon, and Xiaomi, to offer financing options to their customers. However, the deal with PhonePe would have allowed ZestMoney to expand its reach even further, as PhonePe is one of the largest digital payments platforms in India. Despite the setback, ZestMoney is determined to continue its growth and expand into new markets. The company has also explored similar tie-ups with other major players in the digital payments industry, such as Paytm and Google Pay. With these partnerships, ZestMoney hopes to provide more financial access to underserved communities across India and beyond.
The news of the layoffs has drawn criticism from some in the Indian startup community, who have questioned whether ZestMoney’s leadership could have done more to prevent the breakdown of the deal with PhonePe. However, others have praised the company for taking decisive action to manage its costs in a challenging environment. The next step for ZestMoney will be to make sure that it can continue to provide its customers with the same level of service, even as it adjusts to its new financial reality. As such, better communication and transparency between leadership and employees will be crucial in ensuring a smooth transition. There is no doubt that the company has some difficult times ahead but
Despite the setback, ZestMoney remains optimistic about its future prospects. The company has said that it will continue to focus on expanding its services and partnerships, and is confident that it can weather the current economic uncertainty.
As the Indian fintech industry continues to evolve, ZestMoney will be looking to maintain its position as a leader in the digital credit space. While the layoffs are undoubtedly a setback, the company’s leadership will be hoping that it can bounce back stronger than ever in the months and years ahead. With the right strategy and focus, there’s no reason why ZestMoney can’t continue to be a major force in the fintech industry. We look forward to seeing how the company responds to this challenge.
