Ksenia Yudina, the founder & CEO of fintech startup UNest, sent an ominous email to the college saving app’s investors and advisors Friday morning.
“I regret to inform you I resigned from my position as a CEO of UNest following the Board meeting of 10/11,” Yudina wrote in the email, a copy of which was obtained by Insider. “The company is currently insolvent and is in default with our venture debt provider Silicon Valley Bank in the amount of $3 million.”
Yudina, UNest communications, and the company’s COO, Mike Doniger, did not respond to requests for comment.
Yudina, a former vice-president at the Capital Group, founded UNest in 2018 as a way to make it easier for families to save for their kids’ college education. The app also later incorporated ways to build up nest eggs for other major expenses like weddings and down payments for homes.
Investors – including the Artemis Fund, Anthos Capital, Franklin Templeton and Northwestern Mutual – poured close to $40 million into UNest. NBA All-Star Baron Davis and Laura Dern signed on as “brand ambassadors” and UNest acquired two fintech companies, Littlefund and Kidfund.
The company last raised a series B funding round led by the Artemis Fund at a $126 million valuation at the end of 2021, according to Pitchbook.
“UNest’s growth has wildly exceeded our expectations,” Yudina said at the time.
It is not clear what went wrong since then. But many financial technology startups have struggled in the last two years as they have faced the duel headwinds of a dearth of venture funding and skyrocketing interest rates.
Some VCs have warned of a “mass extinction event” for startups as funding dries up and companies have a much harder time being acquired or going public. 132 startups have ceased operations so far this year, according to Crunchbase data.
In her Friday email, Yudina said UNest had two options on the table to avoid bankruptcy: An assignment for the benefit of creditors liquidation or a hostile takeover from a new investor.
Yudina said her and the board initially agreed to the liquidation, but she began to have doubts after the company’s legal counsel “highlighted multiple legal, compliance, regulatory, and operational risks.”
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