The Indian mobile payments giant PhonePe, supported by Walmart, has decided to abandon its intention to acquire the BNPL player ZestMoney.
The media reported that the reason for the refusal to implement the deal was due diligence problems. For the largest representative of the Indian financial services market, focused on providing mobile payments infrastructure, the acquisition of a BNPL player would be of particular importance since in this case, the company could obtain a license as a non-bank financial firm. PhonePe has been striving to obtain this license for a long time.
Preliminary calculations stated that the deal to buy the BNPL player by the Indian payment giant could have a value in the range of 200 to 300 million dollars.
The media, citing their sources, report that the payment company refused the deal because it was not satisfied with the ZestMoney business model and debt obligations. Another factor that influenced the final decision on the deal was the tightening of control measures over digital creditors by Indian regulators.
ZestMoney was founded in 2015. As part of the last round of financing, the company’s value was fixed at $450 million. At the same time, the firm faced difficulties in the process of raising new funds. A deal to transfer ownership to another company is a matter of survival for ZestMoney since the prospects for the near future of the firm are not favorable.
PhonePe managed to attract investment funds for $200 million in March. The payment company received these funds from the majority investor Walmart. The firm’s value currently stands at $12 billion.
PhonePe was founded in December 2015. The company’s application, which is based on the Unified Payment Interface (UPI), was presented in August 2016. Through this application, users have the opportunity to send and receive money, pay for utilities and purchases in stores, replenish accounts of mobile devices, DTH, and data transfer cards, invest in tax savings funds, and liquid funds, buy insurance, mutual funds, and digital gold.