Instant payments company TabaPay has withdrawn from its agreement to acquire the assets of Synapse, a banking-as-a-service startup, citing unmet purchase agreement closing conditions. TabaPay confirmed to TechCrunch that it had issued a termination notice due to these conditions not being fulfilled. Synapse’s CEO, Sankaet Pathak, attributed the failure to Evolve Bank & Trust not fully funding its FBO accounts, which was a critical condition for the deal’s closure. Evolve, however, denies any involvement in the acquisition conditions, stating that it had met its obligations under a separate settlement agreement with Synapse.
Founded in 2014, Synapse operated as an intermediary platform for banks and fintech companies, with significant partnerships including Evolve Bank & Trust and Mercury. The startup filed for Chapter 11 bankruptcy, with the proposed $9.7 million acquisition by TabaPay pending court approval. This amount was substantially less than the over $50 million in venture capital raised by Synapse. TabaPay, established in 2017 and backed by SoftBank, specializes in instant money movement solutions. Synapse has faced significant challenges, including layoffs affecting nearly 60% of its workforce in 2023, attributed to adverse macroeconomic conditions impacting its business operations.
