ZestMoney pioneered India's BNPL — and shut down at a ninth of its value

ZestMoney was founded in January 2016 by Lizzie Chapman, Priya Sharma and Ashish Anantharaman, and became India's best-known buy-now-pay-later platform: instalment credit at checkout for shoppers the banks did not serve, backed by Goldman Sachs and valued at $450 million at its peak. The model had one structural dependency — it ran on credit lines loaded onto prepaid payment instruments, a regulatory permission rather than a moat.

In June 2022 the Reserve Bank of India barred non-banks from loading credit lines onto those instruments, and ZestMoney's core product lost its rails. The search for a buyer began. Zip Co of Australia invested $50 million that September but did not buy the company; talks with PhonePe, valued between $200 million and $300 million, collapsed in March 2023 over due diligence. A $18 million loan lifeline from PhonePe the year before had already shown how thin the options were.

All three founders resigned on 15 May 2023. On 5 December the remaining management told the last 150 employees the company was winding down, keeping only a skeleton legal and finance team to turn off the lights. A business once worth $450 million closed for want of a buyer at a fraction of it — not because Indians stopped wanting instalment credit, but because the instrument it was delivered through stopped being allowed.