PhonePe a leading fintech company plans to buy ZestMoney a buy now pay later (BNPL). PhonePe is majority owned by Walmart which is an American multinational retail corporation.
BNPLsector is facing a setback due to the frequent interest rate hikes by the several central banks of different countries. The sector was also under the scrutiny of various central banks. Recently Reserve Bank Of India also introduced new digital lending guidelines to reduce malpractices.
According to the media reports ZestMoney was struggling to raise fresh funds as the funding winter has its impact on the tech sector.
PhonePe was last valued at $5.5 billion in December 2020, after the $700 million infusion from Walmart. It might operate as an Independent entity after the acquisition of the media reports mentioned.
ZestMoney’s losses widened threefold to Rs 398.8 crore for the financial year ended march 31, 2022, in comparison to Rs 125.8 crore for the previous financial year.