Solid, which claimed to be the ‘AWS of fintech,’ files for bankruptcy after raising nearly $81M in funding

Summary

Banking-as-a-service startup Solid (formerly called Wise) has filed for Chapter 11 bankruptcy protection, according to documents filed in the United States Bankruptcy Court for the District of Delaware on April 7. Founded in 2018, the fintech company had raised a total of nearly $81 million in funding from investors such as FTV Capital and Headline. Solid was valued at $330 million as of August 2022, according to PitchBook, when it announced a $63 million Series B round of funding led by FTV. Palo Alto-based Solid worked with fintech and vertical SaaS companies and offered banking, payments, cards and cryptocurrency products via easy-to-integrate APIs. The company touted itself as “the AWS of fintech” and claimed in August 2022 that it had grown 10x in revenue, doubled its customers to 100 and became profitable. It is now in the process of trying to restructure or sell itself, according to the documents. “After considering all options, we’ve decided that a voluntary Chapter 11 restructuring is the best course,” co-founder Arjun Thyagarajan told TechCrunch. “We’re optimistic that the court-supervised sale process will attract the right buyer, leading to a positive outcome for the company, customers, and shareholders. Solid intends to continue operating its business in the ordinary course through this process.” Solid had not been able to raise more capital since its last funding round and “faced significant and costly litigation,” according to the bankruptcy filings. In 2023, Solid was the target of a lawsuit filed by Series B investor FTV Capital, which was attempting to get its $61 million investment back. FTV Capital’s suit claimed, among other things, that Solid co-founders Thyagarajan and Raghav Lal “lied to FTV concerning the company’s revenues, customer churn, and business generally and further deceived FTV.” The firm also asked for Thyagarajan and Lal to resign. The startup’s co-founders pushed back, filing a countersuit against FTV and its partner Robert Ande...