Pipe's Rapid Rise Falls

A story about Pipe, a fintech startup that reached a $2B valuation quickly but is now facing leadership challenges and rumors of financial troubles.

"Pipe was this cool idea basically - if you had subscription revenue, they're like 'Look, we'll pay you out. If you're gonna make $100 at the end of this year on that subscription, we'll give you 90 of it upfront, we'll keep the extra 10 as margin.' You could get financing, basically a pay advance on your subscription revenue.

On the other side, they had banks and funds that wanted to buy these assets. They're like 'Oh this recurring revenue is an asset class like real estate - you should be able to buy bundles of recurring revenue for a discount.'

Great idea, raises a bunch of money, gets valued at $2 billion after 9 or 12 months of existence. It was considered one of the hot winners.

But this week all the founders stepped down, and they didn't have replacements in place. The rumor was that the CEO loaned $80 million to a bitcoin mining company without telling the board, lost it all, and the board fired the CEOs months ago. The founder has denied this, only confirming they did sell some secondary shares. We'll have to wait and see how it turns out."