Startup Jumio Files for Bankruptcy

by San Antonio Attorney

Junio was funded by Andressen Horowitz and serves as a mobile and online credential business.  The method of authentication is through scanning and reading information from valid IDs and payments cards.

The company will soon file for Chapter 11 bankruptcy through the United States Bankruptcy Court and will eventually sell the assets to Eduardo Saverin, an early backer and co-founder of Facebook.

‘Jumio Acquisition’ was formed by Saverin in order to acquire these assets and rendering financial aid that costs $3.7 million, in order to maintain company operations.

The funds given by Saverin are given as a ‘debtor-in-possession’ financing, maintaining at a rate of 4% per annum.  This will allow Jumio to maintain operations, while the sale process is ongoing.  The asset purchase agreement will be subjected to better offers and it is not an assurance that Jumio Acquisition will prevail until the completion of a court-supervised auction.

The company’s subsidiaries that located outside the United States are spared from the court filings but will be included in the business sale.  Jumio will retain Landis Rath & Cobb as its legal advisor and Sagent Advisors as its financial advisor.  The restructuring advisor job is shouldered by Ernst & Young Capital Advisors.

Stephen Stuut, company CEO of Jumio, assured the public that this move is not considered as the demise of the company.  Rather, this move was entirely necessary so that the company can still thrive as a unit.

Jumio, was a popular start-up due to its utilization of technology, which allows users to scan their payment card or valid ID to any camera (e.g.  webcam, phone camera) for validation.  The main principle behind this is the reduced friction of the cards when swiped, thus reduce the chances of skimming and prevent any case of fraud.

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