Fintech startup Solid’s co-founders, Arjun Thyagarajan and Raghav Lal, have strongly refuted the fraud allegations made against them by Series B investor FTV Capital. In response to FTV’s lawsuit seeking the return of its $61 million investment, Thyagarajan and Lal have filed a countersuit and maintain that the claims made by FTV are unfounded and an attempt to recoup their investment.
Key Takeaway
Co-founders of fintech startup Solid, Arjun Thyagarajan and Raghav Lal, strongly deny FTV Capital’s allegations of fraud and deception. In response to FTV’s lawsuit, Thyagarajan and Lal have filed a countersuit, asserting that FTV’s claims are unfounded and an attempt to reclaim their investment. The outcome of this legal battle will shape Solid’s future in the fintech industry.
Background: Solid’s Offering in the Fintech Space
Solid is a fintech company that enables businesses to create and offer their own financial products, including banking, payment solutions, and cards. At the time of FTV Capital’s investment in 2022, Solid was also venturing into cryptocurrency products.
The Lawsuit and Allegations
FTV Capital filed a lawsuit against Solid in the Delaware Court of Chancery, alleging that Thyagarajan and Lal had deceived and misled the firm regarding the company’s revenues, customer churn, and overall business performance. FTV also claimed that the co-founders attempted to conceal their actions and sent a cease and desist letter to their head of finance, who FTV accused of sharing information with them.
Co-founders’ Response and Counterclaims
In their countersuit, Thyagarajan and Lal described FTV Capital as an “aggressive private equity firm” and accused the firm of resorting to fabricated fraud claims, threats, and intimidation tactics to recover its investment. They maintained that FTV’s allegations were baseless and insisted that they had done nothing wrong.
Thyagarajan and Lal stated that they had provided full access to Solid’s financial information to FTV for due diligence purposes, and while FTV raised concerns about revenue and churn, a revised agreement was reached. The relationship between the parties deteriorated further during the challenging period known as the “crypto winter,” which significantly impacted Solid’s revenue.
The Financial Situation and Current Challenges
While Solid had reported impressive growth and profitability at the time of its Series B funding, the company’s financials have since taken a hit. Thyagarajan confirmed that revenue had declined by 70% due to customer churn, but the total value of transactions processed had increased to $5.79 billion in 2023.
Conclusion: Awaiting the Outcome
With both parties locked in a legal battle, the future remains uncertain for Solid and its co-founders. Thyagarajan and Lal believe FTV’s claims lack merit and assert that they have acted in good faith throughout their dealings with the private equity firm. The resolution of this dispute will determine the way forward for Solid and its ability to continue providing innovative fintech solutions to businesses.
