Vesttoo revenue reached $110 million in 2022 prior to fraud scandal
Vesttoo revenue reached $110 million in 2022 prior to fraud scandal
According to a declaratory filing as part of the company’s Chapter 11, interim CEO of the company Ami Barlev revealed that Vesttoo's revenue surged from $30 million in 2021 to $110 million in 2022
Vesttoo’s revenue reached $110 million in 2022, compared to just $30 million in 2021, according to the interim CEO of the company Ami Barlev. Barlev revealed the figures in a declaratory filing as part of the company’s Chapter 11 proceedings currently taking place in a Delaware court. Barlev also stated that Vesttoo's EBIDTA in 2022 was estimated at around $60 million.
Vesttoo - partly backed by Banco Santander's fintech venture capital arm Mouro Capital - has laid off staff, closed offices and appointed an interim chief executive following the discovery of fraudulent letters of credit used on its platform.
According to Barlev, the company was planning on embarking on a funding round at a $1.5-2 billion valuation prior to the outbreak of the fraud scandal.
"We believe the steps we are taking are best for Vesttoo’s long-term growth and success," Barlev said in a statement last week. "Not only will they result in a strong, more sustainable capital structure, but they will provide us with the platform to aggressively pursue all parties that harmed our business."
Vesttoo provides insurers with access to so-called insurance-linked securities - an alternative form of reinsurance. These securities may be backed by collateral in the form of letters of credit.
The company has conducted internal and external analysis of events leading up to the first report of a fraudulent letter of credit that was used in many transactions. Led by Mouro, Vesttoo last raised $80 million at a $1 billion valuation last October.
Vesttoo faces legal action on several fronts, including from the Bermuda Monetary Authority (BMA) and White Rock Insurance (SAC), who are targeting the liquidation of Vesttoo in the Supreme Court of Bermuda.
In addition, Clear Blue Insurance Group became the first external organization to request to appear in the company’s Chapter 11 bankruptcy case. Clear Blue and Vesttoo announced a partnership in August 2022 through which the Israeli startup was set to deploy as much as $1 billion from the capital markets through Clear Blue’s property and casualty programs.
Reuters contributed to this report
