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 Anderson. In it, they described FTV as “an aggressive private equity firm,” and claimed that “the moment its investment was no longer profitable, [the firm was] resorting to made-up claims of fraud, threats and strong-armed tactics to try to get its money back.”
According to the bankruptcy filing, the FTV litigation was dismissed in April of 2024 “with prejudice under a settlement reached by the parties.”
As of the petition date, Solid said its capital structure consisted of unsecured trade debt totaling approximately $760,000 with “a limited amount of current revenue” and approximately $7 million in cash on hand with approximately $2 million of that held in non-liquid reserve accounts. It claims to now only have three employees.
The company has filed for bankruptcy under subchapter V, which imposes shorter deadlines for filing reorganization plans and allows for greater flexibility in negotiating restructuring plans with creditors.
Solid is not the first BaaS startup to file for bankruptcy. Last April, Synapse famously filed for Chapter 11, hoping to sell its assets in a $9.7 million fire sale to another fintech, TabaPay. But TabaPay walked.
One thing both startups had in common? Evolve Bank & Trust was a partner bank. Notably, another fintech – Mercury – recently declared that it ended its relationship with Evolve.
Fintech Business Weekly’s Jason Mikula and RK | Consultants posted about the bankruptcy on X. According to Mikula, Solid’s 20 largest unsecured creditors include Amazon (AWS), regulatory consulting shop FS Vector, Visa, Plaid, Trulioo, Spade and a number of law firms.
TechCrunch has reached out to FTV for comment but had not heard back at the time of writing.
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