After months of negotiations, PhonePe decided to cancel its acquisition of the buy-now-pay-later (BNPL) platform ZestMoney, according to three people familiar with the matter. This is a significant setback for the cash-strapped ZestMoney at a time when the overall technology ecosystem, and particularly the fintech sector, is experiencing a funding crunch.
“The deal is off, and the company boards and investors have been made aware of the development in recent days.” “After months of due diligence, PhonePe has decided not to proceed with the acquisition,” said a source familiar with the situation.
The failure of the acquisition is likely to be announced to ZestMoney employees soon. According to sources close to the situation, lapses in due diligence, disagreements over valuation, the sustainability of the business, and ZestMoney’s shareholding structure were among the reasons for the talks failing to materialise.
