Lifeline for ZestMoney to turn around business as existing backers pump funds

economictimes.indiatimes.com:

ZestMoney has raised $5-7 million from a clutch of investors, including existing backer Quona Capital, according to two people aware of the matter. The funding comes in the wake of payments major PayU writing off its investment in the company. Last fiscal, PayU’s close to 15% stake in ZestMoney was valued at $38 million.

“The equity infusion will help keep the company on track while it attempts to turn around after the failed acquisition bid by PhonePe,” a senior executive of a fintech company told ET, requesting not to be named. An email query sent to Quona Capital remained unanswered. Zip, Omidyar Network India, Flourish VC and Scarlet Digital are the other entities which are understood to have participated in the latest funding round.

ET had written on May 17 that ZestMoney's existing investors were trying to come together and pump in funds. “ZestMoney has continued to scale effectively since the DLGs were announced in India, and we have been impressed with the company’s progress,” Ganesh Rengaswamy, managing partner at Quona Capital, had said on May 17. “ZestMoney’s credit quality remains high and the company is close to breakeven.

We are happy to support this next chapter for ZestMoney...” One of the persons cited earlier said the current management has offered 15-20% increase in salary to some of its key employees to keep them motivated and help drive the turnaround. ZestMoney is currently being led by Mohit Chhajer, Mandar Satpute and Abhishek Sharma. They were given charge of ZestMoney by its cofounders--Lizzie Chapman, Priya Sharma and Ashish Ananthraman—who had quit in the middle of May.Looking for a turnaround The investors who led the last few funding rounds at ZestMoney are hopeful that offering the right