According to a report by TechCabal, the fintech company Float, which provides credit lines for businesses, is reportedly in financial trouble after making risky trades.
According to TechCabal, Float entered into a trading agreement with a firm looking to buy $2.5 million worth of USD. Float made the trade using a fixed exchange rate of ₦748 to $1. The company received the naira equivalent of the total sum and promised to remit the agreed dollar amount to the client’s designated bank account within two days.
Float was apparently defrauded by its exchange merchant when it attempted to buy the $2.5 million worth of USDT, purchasing only $1.5 million.
Digging Deeper
According to sources, Float is currently working on bridge financing and will present payment plans to its clients for eventual payback. But the company has apparently lost a lot of trust with most of its customers. At the moment, some of Float’s investors are conducting a forensic audit of Float’s accounts to handle the situation.
The Bigger Picture
The company raised $17 million in January 2022 in a seed round which was a mix of $7 million in equity and $10 million in debt.
Investors included Tiger Global JAM Fund, Kinfolk, Soma Capital, Ingressive Capital, Magic Fund as well as angel investment from Y Combinator CEO Michael Seibel.
The company which was co-founded by Jesse Ghansah, was his second company to enter Y-Combinator after co-founding OMG Voice.
Controversially, a second co-founder of OMG, Prince Boampong, who had pivoted and founded the fintech Dash, was recently placed on indefinite leave pending an investigation into the company’s financial impropriety.
Dash had raised $32 Million in a seed round from investors.
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