Startup News: Wirecard files for insolvency amid accounting scandal

#fintech #startups #collapse #insolvency #wakeupcall #bankruptcy #classaction

This is a wake up call for all FinTech startups, including Indian, dealing with trust of millions!

You should also know that class action suits can now be filed in India under the Companies Act, 2013. These provisions permit members and depositors to approach the National Company Law Tribunal (“NCLT“) if they believe that the affairs of the company are being conducted in a manner detrimental to the interest of the company and its shareholders.

Coming to the news, Germany-based Wirecard has filed for insolvency, owing creditors almost $4 billion after disclosing a gaping hole in its books in Germany’s worst accounting scandal.

It comes after the paytech firm disclosed a €1.9 billion hole in its accounts last week.

News of its insolvency filing has causing its shares to dive almost 80% on 25 June. They have lost 98% since auditor EY questioned its accounts last Thursday, as reported on Reuters.

Its implosion came a week after EY, its auditor for over a decade, refused to sign off the 2019 accounts, forcing out chief executive, Markus Braun, and leading Wirecard to admit that $2.1 billion of its cash probably didn’t exist.

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Wirecard files for insolvency amid accounting scandal - FinTech Futures

Wirecard has filed for insolvency, owing creditors almost $4 billion after disclosing a gaping hole in its books in Germany's worst accounting scandal.

Turning Point: Two founders turned bankruptcy into growth with their startup venture Likvido

#liquidity #SME #smallbusiness #latepayments #fintech #fintechstartups #covid19 #startupfunding #SaaS

Nearly one in five (18%) of Europe’s small and medium-sized enterprises (SMEs) say that late payments threaten the survival of their business, according to Intrum’s 2019 European Payment Report.

Likvido.com, co-founded in March 2018 by Maximilian Frimmer and Lars Holdgaard, offers #SMEs an inverse management system which “connects the dots” between their accounting systems, Frimmer tells FinTech Futures. The start-up recently secured a €2.5 million seed investment from Paris-based investor, BlackFin.

The fintech automates actions for chasing late payments, like a SalesLoft campaign, but for late payments rather than new client engagement. It runs a proactive credit check on new clients to inform them of the number of days required for a campaign and the credit amount. This happens before building a workflow with emails, calls and texts which can also include ‘to do’ lists for account managers to charge late payment fees. If all this does not work, then Likvido.com will loop in a debt collection agency with just “one click”.

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Two founders turned bankruptcy into growth - FinTech Futures

In 2017, two Danish founders were facing bankruptcy. Instead of giving up, they turned exactly what had crippled them into a growing business - late payments.