Solid Financial Technologies, a fintech startup once heralded as the “AWS of fintech,” has filed for Chapter 11 bankruptcy protection. This move comes after the company raised nearly $81 million in funding from investors such as FTV Capital and Headline. The filing was made in the United States Bankruptcy Court for the District of Delaware on April 7, 2025.
Company Background and Growth
Founded in 2018 and formerly known as Wise, Solid aimed to revolutionize the fintech landscape by offering banking-as-a-service (BaaS) solutions. The Palo Alto-based company provided fintech and vertical SaaS companies with banking, payments, cards, and cryptocurrency products through easy-to-integrate APIs. By August 2022, Solid had secured a $63 million Series B funding round led by FTV Capital, valuing the company at $330 million. At that time, Solid reported a tenfold increase in revenue, a doubling of its customer base to 100, and claimed profitability.
Legal Challenges and Financial Struggles
Despite its promising trajectory, Solid faced significant legal and financial challenges. In 2023, FTV Capital filed a lawsuit against Solid, alleging that co-founders Arjun Thyagarajan and Raghav Lal misrepresented the company’s revenues, customer churn, and overall business health. FTV sought the return of its $61 million investment and called for the resignation of the co-founders. Thyagarajan and Lal countered these claims, describing FTV as an aggressive private equity firm resorting to unfounded allegations to recover its investment.
The legal battle concluded in April 2024 with a settlement that led to the dismissal of the lawsuit. However, the financial strain from the litigation, coupled with an inability to secure additional capital post-Series B, left Solid in a precarious position. As of the bankruptcy filing, the company reported approximately $760,000 in unsecured trade debt, limited current revenue, and around $7 million in cash reserves, with $2 million held in non-liquid reserve accounts. The workforce had also dwindled to just three employees.
Bankruptcy Filing and Future Prospects
In response to these challenges, Solid opted for a voluntary Chapter 11 restructuring, aiming to facilitate a court-supervised sale process to attract potential buyers. Co-founder Arjun Thyagarajan expressed optimism about achieving a positive outcome for the company, its customers, and shareholders through this process. The bankruptcy filing under subchapter V is designed to expedite reorganization plans and provide flexibility in negotiations with creditors.
Industry Context
Solid’s bankruptcy highlights the volatility and challenges within the BaaS sector. The company is not alone in facing such difficulties; other BaaS startups have also encountered financial and operational hurdles, underscoring the complexities of sustaining growth and stability in the rapidly evolving fintech industry.
