Articles by deBanked Staff

Co-founders of $2B Recurring Revenue Funding Platform Step Down

It’s not a loan, it’s a trade. That’s the mantra of Pipe, an alternative finance platform that allows businesses to trade their future recurring revenues in exchange for upfront capital today. It sounds similar to a merchant cash advance but the company has rejected such comparisons in the past. It instead branded itself as the “Nasdaq for revenue” and grew itself into getting a $2 billion valuation just last year.

Last week, however, all three co-founders announced they were stepping down from their roles. In an exclusive with Techcrunch, Pipe co-CEO Harry Hurst said that they realized they needed an executive team that could really take the company to the next level, explaining that “we’re 0-1 builders, not at-scale operators.”

The following day, a story in Forbes suggested that there was more to the announcement, drawing attention to the possibility that Pipe had facilitated deals with bitcoin mining companies and that a source had said that some of them had gone bad. A since deleted tweet by a VC had said that there had been a significant loss on at least one of them.

The timing of Hurst’s resignation, announced before a new CEO could even be hired, allowed rumors to swirl. On Sunday night, Hurst finally addressed them.

A tweet by a VC that had originally fueled some of the unflattering rumors has since been deleted.

IOU Originated Whopping $74.2M in Q3

IOU Financial experienced a strong third quarter, reporting total loan originations of $74.2M, a 25.8% increase over Q2. The year-to-date total now stands at $192.7M.

“IOU Financial continues to grow revenues and invest in scalability while reducing its adjusted operating expense ratio,” said Robert Gloer, President and CEO, in an official announcement. “We remain laser focused on scalability and growth while maintaining consistent underwriting standards, and we expect to build on this trend in the months and quarters to come.”

IOU attributes the growth to “healthy demand from borrowers” and “continued demand from investors seeking high quality loans.”

Notably, the company said that collections had been in line with expectations and it had “not seen significant increases in delinquencies, defaults or loan modifications.”

Garcia Expected to Agree To Consent to SEC Judgment in MJ Capital Case

Former MJ Capital Funding CEO Johanna Garcia is expected to consent to judgment with the SEC without admitting or denying the claims, according to documents filed in the SEC case. As part of that she will have to disgorge ill-gotten gains, pay prejudgment interest thereon, and incur a civil penalty. The total amount is to be determined.

At last tally, the Receiver said it had received more than 10,000 claims and is busy verifying all of them. MJ Capital raised nearly $200M from investors.