US firm Jumio declared bankruptcy and agreed to sell itself to a firm backed by existing shareholder and Facebook co-founder Eduardo Saverin.
Jumio, whose ID verification technology enables enterprises to scan and obtain data from payment cards, is being sold to Jumio Acquisition, a vehicle set up by Saverin, for an undisclosed sum.
Stephen Stuut, Jumio’s CEO, said the firm was “thriving from an operational standpoint as we continue to see robust bookings and build strong relationships” with leading brands.
However, a company statement added: “Certain legacy issues combined with related government investigations and proceedings have made it difficult for Jumio to secure necessary funding for its operations.” It did not explain further.
As a result, the firm intends to implement its sale as an asset sale under the US bankruptcy code. To that end, Jumio has commenced Chapter 11 proceedings in the US bankruptcy court. This action, it hopes, will allow an orderly sale to occur in “a court-supervised environment”.
The firm’s subsidiaries outside the US are not included in the filing but are included in the sale. Jumio expects its operations to continue without disruption during the sale process.
The Saverin vehicle has committed to tide over Jumio with $3.7 million in financing, charged at an interest rate of 4 per cent per annum.
The sale may be the subject of rival bids should any be received.