US-based Banking-as-a-Service (BaaS) platform Solid has filed for Chapter 11 bankruptcy protection, marking a dramatic fall for the once-promising fintech firm. The filing comes less than two years after Solid raised $63 million in a Series B round led by FTV Capital, which valued the company at $33 million and positioned it as a fast-scaling player in embedded finance.
Solid’s rise was driven by claims of 10x growth across revenue, customer base, and processed transactions in the 12 months prior to the funding. However, those assertions came under fire when lead investor FTV Capital filed lawsuits against co-founders Arjun Thyagarajan and Raghav Lal, accusing them of inflating company metrics. That legal battle was settled out of court in April 2024.
According to the bankruptcy filing, Solid now holds approximately $7 million in cash, has only three employees left, and faces around $760,000 in unsecured trade debt. Creditors include major names such as Amazon (AWS), Visa, Plaid, Trulioo, FS Vector, and several law firms.
Despite the dire situation, co-founder Arjun Thyagarajan says the company will continue to operate during the bankruptcy proceedings: “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’s downfall sends further shockwaves through the already embattled BaaS sector, which was rocked by the collapse of fellow provider Synapse in April 2024. The sector now faces increased scrutiny as questions mount over governance, transparency, and the long-term sustainability of BaaS business models.