Figure Technologies has reportedly cut its funding goal and may spin off some product lines.
Bloomberg reported Monday (Feb. 6) that the startup building blockchain-based financial products aims to raise $100 million — one-third of the amount it had planned earlier and seemed to be near achieving— but that it may wait until the venture capital market picks up.
Figure is also considering a restructuring — though not layoffs — and a spinoff of its markets and payments businesses from its lending business, the report said.
These moves, along with an earlier scrapping of plans to go public, come as Figure Technologies deals with the industrywide downturn that has hit the sector, according to the report, which cited unnamed sources regarding the fundraising.
“We’re just dealing with a lot of headwinds in the industry right now,” Figure Co-founder and CEO Mike Cagney told Bloomberg, while not commenting on any fundraising efforts. “It’s a very hard market.”
Figure did not immediately reply to PYMNTS’ request for comment.
The PYMNTS FinTech IPO Index found that while tech stocks roared back to life at the beginning of February, there’s a long way to go before these IPOs come off the “busted” list after a year in which the index was cut in half.
Most of the three dozen names tracked in the index still trade below their offering price — and almost all of them are down double digits from their IPO levels.
During Figure’s most recent funding round, in May 2021, the startup raised $200 million and was valued at $3.2 billion.
The firm said at the time that it will use the capital to support further growth for it and its blockchain, Provenance, which it uses to provide equity management, loan origination, payment, banking and private fund services.
Figure Technologies has built a presence in delivering core banking services across one platform that is geared to FinTechs, non-banks and retailers through the company’s embedded issuer processing services, while also providing FinTechs with a range of other credit solutions as a capital markets partner, Cagney told PYMNTS’ Karen Webster in an interview posted in September 2022.
“The ultimate democratization of banking is going to be underpinned by blockchain — and the movement to a decentralized, rather than centralized, construct,” Cagney said at the time.