Three years later, throw the blind. Verse, the instant mobile payment application, will stop operating next September. The company was acquired by Block, the fintech created by Twitter co-founder Jack Dorsey, in 2020 for just over 30 million euros. The startup was fined for failing to comply with anti-money laundering and terrorist financing requirements in Lithuania, where it is licensed to operate in Europe.
The company published a communication to its users on Wednesday in which it specified that the final closure will take place on September 13. After that date, access to the application will not be given. “After an exhaustive evaluation process, we have not been able to identify a sustainable path for Verse that allows us to continue to grow and provide the level of service and innovation that our customers expect and deserve,” they explain in said communication. They ask their clients to withdraw the money that they will have within the platform – a process that can be extended for seven days before that date.
It must be taken into account that the Bank of Lithuania, where the company has a subsidiary that owns the financial license to operate in Europe, imposed a penalty of 280,000 euros for “serious and systematic violations of prevention of money laundering and financing of terrorism The country’s regulator gave a margin until October 1 to eliminate all the deficiencies identified in its operations.
As stated in the resolution dated last March, consulted by La Información, Verse Payments Lithuania UAB did not comply with the requirements to determine and verify the identity of clients and their beneficiaries. “The deficiencies of the procedures to know the client did not allow to adequately clarify the nature of the commercial relationship of the client; they did not adequately implement the requirements for the simplified identification of the client”, he points out.
The listed ‘fintech’ Square, founded by the creator of Twitter Jack Dorsey and today renamed Block, took out the checkbook three years ago now to take over Verse. The company had raised more than 40 million euros since it was founded, although some 30 million injected were returned to various funds two years ago in a recapitalization process. The buyer announced that it would maintain the independence of the startup.
Purchase of more than 30 million
The amount paid was not made public by either party. As confirmed by sources close to the operation to La Información, the price paid is less than 50 million euros and a valuation of more than double that set when 8 million euros were raised in a round with investors such as Nikesh Arora, NBA director David Stern or businessman Martín Varsavsky. It would therefore be in a range between 30 and 40 million. The payment was made with shares. And the ‘rally’ experienced by the shares of the old Square on the US stock market led to a significant increase in the money received by shareholders.
Verse eventually numerous changes since its foundation. In October 2017, the board of directors decided to remove the three founders, Borja Rossell, Álex Lopera and Darío Nieuwenhuis, from management. Failure to meet the growth targets that had been set was the reason given by the main partners.
After that, another new management team arrived, made up of various executives from the sector -among whom was the former head of the Spanish business of the neobank Revolut- and they also ended up leaving. In the last phase before the purchase, one of its initial shareholders and mentor, Bernardo Hernández, ended up assuming the role of CEO on an ongoing basis. This came out a year and a half ago from the discipline of the company.
