The once-hyped identity verification startup Jumio has voluntarily begun Chapter 11 bankruptcy proceedings, reports TechCrunch. Jumio was launched in 2010 and got early backing from Facebook cofounder Eduardo Saverin, among others. The company created an innovative way to check and verify the authenticity of photographic identification by allowing a user to simply hold that ID up to a webcam or mobile phone’s camera. Some of its major clients include United Airlines, Airbnb, and EasyJet.
Yet in the years following its founding, Jumio saw increased competition from companies including Card.io, which was bought by PayPal. TechCrunch also points out that the company’s core business was hurt by the launch of Apple Pay, which allowed users to make secure, authenticated online and mobile payments without the need for ID checks each time.
In a blog post on the company website, Jumio said the reason for its bankruptcy filing was because of “certain legacy issues combined with related government investigations and proceedings.” Besides third-party competition, the company has also been besieged by leadership changes. Fortune reported that Jumio founder and CEO Daniel Mattes left the company in 2015 after auditors found possible financial irregularities.
But this isn’t the end for Jumio, according to current CEO Stephen Stuut. “Despite some of the challenges Jumio’s leadership team inherited, our underlying business remains exceptionally strong. The court-supervised sale and restructuring process will allow us to strengthen the Company’s financial structure and extend our leadership position in ID verification,” Stuut wrote in the blog post.
The company also revealed that early backer Eduardo Saverin has formed a company called Jumio Acquisition to buy all of Jumio’s assets.
“The fair and orderly process announced today will allow Jumio’s new management and its employees to continue to serve its top tier customers and to realize the company’s potential,” Saverin said in the company’s blog post. “With the company’s future operations in good hands, Jumio Acquisition is pleased to make this stalking horse bid to facilitate an orderly transition to a promising future for Jumio.”
In the same blog post, Jumio also stressed that its international assets are not included in the Chapter 11 bankruptcy filings, but will be part of any sale and it noted that existing customers and employees “should see no interruption as a result of this process.”