ZestMoney’s distress sale calls into question BNPL’s viability

IN FOCUS

In today’s newsletter, we look at:

• Whether BNPL startups like ZestMoney and Pace failed because their business models were problematic
• Why MoneyHero’s ‘pre-announcement’ of its sunny results was met with a dismal market reaction
• What Aspire needs to do to become a regional tech powerhouse

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Hi there,

It helps to have friends, whether in life or in business.

Sam Altman, CEO of OpenAI, demonstrated this late last year after he was fired by the organization’s board. His supporters, who included Microsoft CEO Satya Nadella, sprang into action and openly voiced support for Altman, playing a pivotal role in his reinstatement.

Ultimately, it was members of the OpenAI board who ended up being defenestrated.

This is a lesson that the BNPL sector is learning the hard way. Over the past year, stand-alone players like ZestMoney and Pace have run into trouble, as my colleague Samreen recounts in this week’s Big Story.

While the industry as a whole has suffered from higher interest rates and tighter regulations, bank partnerships have given firms like India’s Slice a lifeline.

Ambitious founders are often tempted to go at it alone. However, the travails faced by BNPL startups show that sometimes, it doesn’t hurt to partner with someone else.

— Simon

THE BIG STORY

BNPL’s future on a knife-edge as ZestMoney averts shutdown

Image credit: Timmy Loen

BNPL startups will have to reinvent themselves amid chatter of the model’s fallout.

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