Solid files for Chapter 11 bankruptcy protection

Formerly known as Wise, Solid secured nearly USD 81 million in funding, with its last valuation reaching USD 330 million in August 2022, benefiting from investments from FTV Capital and Headline. The company collaborated with fintech and vertical SaaS firms, providing banking, payments, cards, and cryptocurrency products through APIs. Additionally, Solid, which thought of itself as the ‘AWS of fintech’, said in August 2022 that it had substantially scaled its revenue, increased its customer base, and achieved profitability.

What led to Solid’s bankruptcy? 

According to the documents, Solid is currently working towards restructuring or selling its operations, stating that, after considering all options, it has decided that a voluntary Chapter 11 restructuring is the suitable course of action. Additionally, as cited by TechCrunch, Solid’s officials are confident that the court-supervised sale process can attract a suitable buyer, ultimately providing the company, its customers, and its shareholders with a positive outcome. At the same time, it was mentioned that Solid plans to continue operating in the ordinary course throughout this process.

Furthermore, the bankruptcy filings underline that Solid had not been able to secure more capital since its funding round in September 2022, when it obtained USD 63 million, while also encountering costly litigation. FTV Capital, one of the investors in the Series B, filed a lawsuit against Solid, claiming that the company misled it regarding its revenues, customer churn, and business generally. At that time, Solid countered the allegations, mentioning that when the investment was no longer profitable, FTV started to make up claims of fraud and other tactics to return its capital.

Now, the bankruptcy filing includes that the FTV litigation was dismissed in April 2024 due to a prejudice under a settlement achieved by the parties involved. Solid filed for bankruptcy under subchapter V, which institutes a shortened deadline for reorganisation strategies and enables more flexibility in negotiating restructuring plans with creditors.

Solid’s decision to file for bankruptcy comes a year after another BaaS company took the same path, with Synapse filing for Chapter 11 and intending to sell its assets to another fintech, TabaPay, which ultimately walked out of the deal. Solid and Synapse worked with the same partner bank, Evolve Bank & Trust. It is worth mentioning that Mercury, another fintech collaborating with Evolve, recently ended its partnership with Evolve, citing a range of operational issues at the bank.