The Netherlands-based investment firm Prosus NV has decided to write off its investment in ZestMoney, a troubled Indian fintech startup. Prosus, known for backing several Indian startups such as PharmEasy, BYJU’S, PayU, Swiggy, and others, declared in its FY23 annual report that it has lost “significant influence” over the course of the year.
Although Prosus held a 19.44% stake in Primrose Hill Ventures, the holding company for ZestMoney, it did not disclose its stake in either 2022 or 2023 in its annual reports for those periods. The investment firm has marked its investment in Primrose Hill (ZestMoney) as zero, compared to $38 million in FY22.
ZestMoney has been facing challenges in recent months, starting with the cancellation of an acquisition deal by fintech giant PhonePe, citing issues related to valuation and due diligence. Following the failed acquisition, the consumer lending startup laid off between 20% to 30% of its workforce. According to sources, approximately one-third of ZestMoney’s employees were absorbed by PhonePe, while the remaining employees were retained.
A month after the layoffs, ZestMoney’s founders – Lizzie Chapman, Priya Sharma, and Ashish Anantharaman – stepped away from their positions. Sources indicated that PhonePe took over ZestMoney’s technology assets and bad loans in exchange for an $18 million line of credit that the digital payments company had extended to the struggling lendingtech startup.
Following the founders’ departure, Mohit Chhajer, Mandar Satpute, and Abhishek Sharma assumed leadership roles at ZestMoney. Chhajer currently serves as the VP of Finance and FinOps, Satpute as the Chief Banking Officer, and Sharma as the SVP of Growth at the fintech startup.
ZestMoney is now in the process of finalizing a funding round from its existing investors, including Quona Capital, Omidyar India, Flourish VC, and Scarlet Digital.
In addition to writing off its investment in ZestMoney, Prosus also lowered the valuation of edtech giant BYJU’S. The investment firm has invested $536 million in BYJU’S since 2018 and holds a 9.6% stake in the company. In its FY23 annual report, Prosus valued its stake in BYJU’S at $493 million, implying a valuation of $5.1 billion for the edtech startup.
Prosus also released financials for foodtech giant Swiggy, revealing that the company’s losses increased from $300 million in 2021 to $545 million in 2022, according to the annual report.
