Jumio, a startup that provides identity verification software to customers, filed for bankruptcy on Monday. Its next move: sell to Facebook co-founder Eduardo Severin.
Amid investigations over its finances, the Palo Alto, Calif.-based company has filed for chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del., according to court documents obtained by the Wall Street Journal and a statement from Jumio. Its board authorized the move on Sunday.
Founded in 2010, Jumio’s tools let companies quickly verify and process I.D. documents like driver’s licenses and credit cards. In addition to cutting down on the time it takes users to manually enter data (Jumio uses computer vision to scan cards), the company also says it can help reduce fraud. Its customers include United Airlines and Airbnb.
Last year, then-CEO Daniel Mattes resigned following an internal investigation into possible financial irregularities, as Fortune reported in June. Stephen Stuut, previously at TruePosition, took over the job. Neither Mattes, nor the company would comment at the time.
Severin, a Brazil-born entrepreneur and investor best known for co-founding Facebook (fb), is one of Jumio’s earliest investors and main lenders, according to the Journal. He has agreed to acquire the company for $22.7 million, largely made up of debt forgiveness plus $3.2 million in cash. Jumio has borrowed $14 million in convertible debt from Saverin, along with $1.5 million from venture capital firm Andreessen Horowitz, which was later transferred to Saverin, the Journal reports. The startup owes him $15.7 million in total, including interest and unsecured debt. Saverin has agreed to extend up to $3.7 million in bankruptcy financing to keep Jumio going during its bankruptcy process.
Saverin’s purchase of Jumio is subject to a court-overseen auction process and approval.