Synapse has arrived at its resting place in the graveyard of fallen startups.
After years of missteps and struggles, the banking-as-a-service fintech Synapse officially has gone bankrupt. The writing was on the wall — Synapse laid off 40% of its employees last year, and in April, it filed for bankruptcy… and yet somehow, it gets worse.
Synapse had raised more than $50 million in venture funding, including a $33 million Series B led by Andreessen Horowitz in 2019. At the time, PitchBook reported its valuation to be around $180 million. Just last month, when Synapse first declared bankruptcy, it tried to sell its assets for $9.7 million to TabaPay. That’s effectively a 95% discount. And even still, TabaPay passed.
As we saw with the implosion of Silicon Valley Bank last year, when you mess with people’s money, things get messy. When a banking or financial startup fails, ordinary people get hurt. According to Synapse’s filings, up to 100 fintechs and 10 million customers could be impacted. But as industry expert Jason Mikula told TechCrunch, some customers using Synapse operate small businesses, meaning that the impact of Synapse’s collapse could be even more widespread than we think.
TechCrunch senior reporter Mary Ann Azevedo has been following this story as it develops. If you want to know more about how this all went down, Mary Ann has the details on Equity.
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