TabaPay withdraws from purchasing bankrupt Synapse due to infighting among fintech players

TabaPay has abandoned its plans to purchase the assets of troubled banking-as-a-service startup Synapse, leading to a complex web of accusations and denials among the involved parties. Synapse claims that the issue lies with their banking partner, Evolve Bank & Trust, while Evolve denies any wrongdoing. Mercury, another player in the saga, dismisses Synapse’s allegations as having “no merit.”

According to reports, Synapse’s counsel announced in bankruptcy court that the deal with TabaPay would not move forward. TabaPay confirmed the termination of the purchase agreement, citing failure to meet closing conditions. However, Synapse’s CEO remains hopeful that TabaPay can still be convinced to proceed with the acquisition.

The crux of the issue seems to revolve around Evolve Bank & Trust’s failure to fully fund its FBO accounts, a condition necessary for the deal to close. While Evolve maintains that it met the funding condition outlined in their settlement agreement with Synapse, the latter disputes this claim.

Synapse, a San Francisco-based company founded in 2014, has faced challenges after losing partnerships with Evolve and Mercury. Allegations of financial discrepancies and unresolved issues have further complicated the situation, leading to legal battles and bankruptcy filings.

The $9.7 million acquisition deal between Synapse and TabaPay was seen as a lifeline for the struggling startup, which had previously raised over $50 million in venture capital. However, with the deal now in jeopardy, the future of Synapse remains uncertain.

As the fintech industry closely watches this unfolding drama, the implications of these developments on the broader ecosystem remain to be seen. Stay tuned for further updates on this evolving story.