On November 22, alternative finance startup Pipe announced that its three co-founders going down His executive role and a search for a new “veteran” CEO has begun.
In an exclusive interview, co-founder and former CEO Harry Hurst told TechCrunch that the trio are “0-1 builders, not scale operators.” He said that the company’s revenue has been growing year by year, and that the company had a five-year runway.
Finding the right replacement, however, may take some time. Pipe for Beginners It has raised more than $300 million from investors since it was founded in 2019 — and has one outside board member in Peter Akerson, a general partner at Fin Capital who became a VC himself three years ago. Hurst and co-founders Josh Mangle and Zain Alarakia are the only other directors on the board.
Moreover, detractors seem intent on raising questions about the conduct of the business. As of this article’s publication, multiple sources who spoke on condition of anonymity — including one investor who said they had previously invested in the startup — said they had “heard” that Pipe had made a loan of about $80 million or so. Many crypto mining companies. The outfit or outfits went out of business and an estimated $80 million was written off, these individuals said.
Asked about the charges, A company spokesperson told TechCrunch Pipe did not make $80 million in loans to crypto mining companies, and Pipe did not have to “write off” any related receivables in full. Instead, Pipe “confirmed that it provided funding to crypto mining hosting companies,” and when asked if Pipe was missing, she said. Any Amount of money on loans to crypto mining institutions – As a private company, Pipe does not share the company’s finances.
The startup declined to name its crypto-mining-related clients, but it specifically had a pipeline. Public partnership with Compass MiningNow a crypto mining company in trouble has been reported Facing his fair share of struggles.
There are other complaints. One source said Hurst and the two co-founders sold millions of dollars worth of their own stock in a secondary sale, a practice common to many young companies during the pandemic. (The founder of Hoppin, which was founded in 2019, reportedly issued at least $195 million worth of stock.) When we asked Hurst last week how many investors his co-founders let off the table, he declined to answer.
A fintech investor also raised questions about the complexity of the pipeline technology. A company spokesperson asked if there was any issue related to Pipeline Loans. ““While we may see some losses in the current macro environment, such as fintechs, we do not expect potential investors to suffer undisclosed losses or a company that is part of a larger risk profile.”
Hurst seems to be hearing about the speculation surrounding the company. as if Twitter line “VCs and others are hating our company based on rumours,” he said last night. It is clear that there are bad actors who have their own agenda with no regard for the people they hurt. He also wrote: “As a leader, I will not allow this noise to distract us or undermine our team’s incredible dedication to our mission of empowering companies everywhere to thrive over their lifetimes.”
Meanwhile, the search for a CEO continues. Indeed, a Pipe spokesperson reiterated today what the company said publicly last week. “Josh [Mangel] He is now the interim CEO and Harim is at the company in his new role as Vice Chairman. Both want to see Pipe reach its ultimate potential and are committed to finding a new CEO, as reported and announced…”
Once Pipe’s new CEO is named, that individual will take Hearst’s seat on the board, she added.
As for who is helping him with his search, she said, the answer is:Many of Pipe’s stakeholders are part of the CEO search process, including senior executives and investors.
In addition to Finn Capital, other VCs leading investments in the pipeline through their investment firms include Marlon Nichols, managing director of MaC Venture Capital, and Ashton Newhall, a longtime investor with Greenspring Associates and now a partner with Stepstone Group. obtained Greenspring in September last year.
No one responded to requests for comment.
Matthew Cowan of Next47 Capital, another investor in the pipeline, told TechCrunch that they were “not authorized to comment.”
Other backers in the company include Morgan Stanley Counterpoint Global, CreditEase FinTech Investment Fund, 3L, Japan’s SBI Investments; Marc Benioff, of Alexis Ohanian’s Seven Seven Six, Republic and Craft Ventures, led the company. 6 million dollars Seed funding in February 2020.
Meanwhile, a Form-D filed with the US Securities and Exchange Commission in late September by Pep senior adviser Peter Chiaro shows the company recently raised $7.12 million in debt financing. Many startups are shutting down these days.
Pipe’s founder and chief business officer, Michal Cieplinski, is listed as Pipe’s “executive director” in an unnamed filing from the company’s announcement last week, which declined to disclose his earnings.
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