US Banking-as-a-Service platform Solid has filed for Chapter 11 bankruptcy protection.
Solid was last valued at $33 million following a $63 million Series B round led by FTV Capital in August 2022. At the time, the firm boasted of achieving 10x growth in revenue, customer base, and transactions processed in the previous 12 months, with a clear path to profitability.
However, Solid subsequently faced a series of costly lawsuits from FTV Capital, which claimed that company's co-founders Arjun Thyagarajan and Raghav Lal had been lying about the company's revenues and business growth.
The case was settled out of court in April 2024.
In filing for bankrupty, Solid said its capital structure consisted of unsecured trade debt totaling approximately $760,000 with “a limited amount of current revenue”, approximately $7 million in cash on hand and just three employees remaining.
Current debtors include Amazon (AWS), FS Vector, Visa, Plaid, Trulioo, Spade, and a number of law firms.
“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.”
The collapse of Solid will send further jitters through the BaaS sector, following the brutal unwinding of rival provider Synapse in April last year.