Jumio Gears Up For Post-Bankruptcy Sale To Facebook Cofounder

Venture-funded identity firm Jumio has officially filed for bankruptcy.

And that is a bust that ought to be somewhat eye-catching, since the firm has already, in its short time, logged a fairly impressive client list that includes high-profile firms like United Airlines and Airbnb.

With the bankruptcy filing on Monday (March 21), the firm also made public its intention to sell itself off to Facebook Cofounder Eduardo Saverin.

The Chapter 11 filing comes as the firm has been weighed down by a series of investigations of its financial practices. Saverin is Jumio’s main creditor and is offering to pick up the firm post-bankruptcy for $22.7 million. Much of that “buy” price will be debt forgiveness and about $3.2 million in cash. Saverin could, theoretically, face another bidder if someone else moves on the firm through a bankruptcy court-overseen auction process.

Saverin has said the sale would “facilitate an orderly transition to a promising future for Jumio.”

All in, Jumio owes Saverin $14 million in top-ranking convertible debt, plus $1.5 million from Andreessen Horowitz that later moved over to Saverin. Saverin is still owed $15.7 million, according to the recent filing, plus interest, and around $440,000 in unsecured debt.

On top of all that, Saverin, who invested at least $23 million into Jumio, has also extended an additional $3.7 million in bankruptcy financing.

Jumio Founder and CEO Daniel Mattes resigned from the company last year after an internal investigation into some executive stock trades that were apparently a cause for alarm. That was followed by a restatement of financial reports from 2013 and 2014, which brought on a series of governmental investigations, which Jumio claims it is fully cooperating with.

Since Jumio runs on financing, not profit, and investigations have a way of chasing off investors, the firm was left with little choice but to fold up shop — or, at least, sell the shop.

Stephen Stuut, Jumio’s chief executive, noted over 30 potential purchasers that have expressed interest in the company’s assets.

“After thoroughly evaluating all available options, we determined that an asset sale is in the best interests of Jumio and our stakeholders,” Stuut said. “We expect this process to be seamless for our customers with no disruption to our operations.”

Should the sale to Saverin win court approval, Jumio’s investment bank, Sagent Advisors LLC, would pick up a $1.3 million fee, court papers show.