Banking-as-a-Service (BaaS) startup Solid, previously known as Wise, has filed for Chapter 11 bankruptcy protection, officially announcing its situation through documents submitted to the U.S. Bankruptcy Court in Delaware on April 7. Established in 2018, Solid secured nearly $81 million in funding from backers including FTV Capital and Headline, with a valuation reaching $330 million in August 2022, following a $63 million Series B funding round.
Based in Palo Alto, Solid provided a range of services, including banking, payments, and cryptocurrency products via user-friendly APIs, marketing itself as “the AWS of fintech.” The company had claimed to experience a remarkable 10-fold revenue growth and doubled its customer base to 100 while achieving profitability. However, it now seeks to restructure or identify a potential buyer as part of its bankruptcy process.
Co-founder Arjun Thyagarajan expressed optimism about the court-supervised sale process, reiterating that the company intends to continue its operations during this transition. The filings reveal that Solid had struggled to raise additional capital after its last funding round and was dealing with expensive litigation.
In 2023, FTV Capital, one of Solid’s investors, filed a lawsuit seeking the return of its $61 million investment, accusing the co-founders of misrepresenting the company’s financial health and operational metrics. The complaint also suggested Thyagarajan and Raghav Lal resign from their positions. The co-founders countered with their own litigation, alleging that FTV resorted to false claims of fraud due to unprofitability.
As per the latest bankruptcy filing, the litigation with FTV was eventually dismissed in April 2024 through a settlement. Currently, Solid’s financial stance includes approximately $760,000 in unsecured trade debt, limited revenue, and around $7 million in cash—$2 million of which is inaccessible in reserve accounts. The company is now left with only three employees.
Solid has opted for a Subchapter V bankruptcy, which allows for expedited reorganization plans and more flexible negotiations with creditors. This is not the first instance of a BaaS startup seeking bankruptcy protection; Synapse similarly filed for Chapter 11 last April and attempted to sell its assets, though that sale ultimately fell through.
Notably, both Solid and Synapse had partnered with Evolve Bank & Trust, while another fintech, Mercury, recently terminated its relationship with the bank. Major unsecured creditors of Solid include prominent names such as Amazon (AWS), Visa, and several law firms, indicating the widespread impact of its financial difficulties.
As of now, there has been no response from FTV regarding the ongoing situation.
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