Jumio files for bankruptcy in US

23 March 2016

Online and mobile credentials authentication business Jumio has announced that its US operation has commenced voluntary Chapter 11 proceedings in the US Bankruptcy Court in a move that will enable the company to sell its assets.

Jumio is in the process of selling its various assets to Eduardo Saverin, an early backer of the company who also co-founded social media giant Facebook.

Through an entity called ‘Jumio Acquisition’, Saverin will purchase the assets and also provide the company with $3.7 million (€3.3 million) in financing to support its current operations.

Jumio said it has opted to pursue Chapter 11 proceeding as it has reached a point where it cannot secure additional funding due to “certain legacy issues combined with related government investigations and proceedings”.

The company's non-US subsidiaries are not included the court filings, while the asset purchase is subject to other offers, meaning Saverin is not guaranteed to secure a deal.

However, in a statement, Saverin said: “The fair and orderly process announced today will allow Jumio’s new management and its employees to continue to serve its top-tier customers and to realise the company’s potential.

“With the company’s future operations in good hands, Jumio Acquisition is pleased to make this stalking horse bid to facilitate an orderly transition to a promising future for Jumio.”

Stephen Stuut. Chief executive of Jumio, also added that the move does not mean the end of the firm, as its “underlying business remains exceptionally strong”.

Stutt added: “The court-supervised sale and restructuring process will allow us to strengthen the company’s financial structure and extend our leadership position in ID verification.”

The filing comes after Jumio in December restated its financial results for both 2013 and 2014, a move that meant the company’s valuation was lower than the implied valuation for shares previously purchased by investors.

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