Mike Cagney, Ex-SoFi Boss ‘We’re Dealing with a lot of Headwinds in Industry’, Slashes Funding Targets

Bloomberg | Lizette Chapman | Feb 6, 2023

Image: Bloomberg

Figure is one of countless once-hot startups now suddenly forced to contend with an icy environment for venture capital, particularly in the world of crypto. 

• Challenging times:  Two years ago, when investors’ fintech frenzy was at its peak, Cagney raised $200 million for Figure. The company at the time was valued at $3.2 billion, gaining it entrance into a rarified club of multibillion-dollar startups.
  • But recently, things have gotten tougher. In the last few months, several senior leaders have left Figure, including the president and chief financial officer; it scrapped an attempt to take its lending business public through a special purpose acquisition company; and executives slashed their targets on an ambitious fundraising effort.
  • The company, which builds financial products on a blockchain, is also seeking to spin off some product lines as it navigates a dramatic industry downturn.

See:  Market Downturns are a Great Time to Build a Startup, or are they?

• The company is currently seeking to raise $100 million, according to people familiar with the matter who asked not to be identified because the discussions were private. That’s one-third the sum it initially planned. Figure is not in any serious deal talks at the moment, the people said, and the startup is likely to delay raising money rather than agree to a down round at a lower valuation.
• Last month, in another setback to Figure’s endeavors to access more cash, the startup abandoned efforts to take its lending product public via a reverse merger with a mid-sized mortgage bank. The transaction was supposed to serve as a major milestone and strategic inflection point for the startup.

Mike Cagney, Former-CEO, SoFi:

We’re just dealing with a lot of headwinds in the industry right now. It’s a very hard market.

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