Yahoo Finance The CEO of UNest, a college savings app, stepped down after she said the company was 'insolvent.' Here's what customers need to know.
UNest is a startup that makes it easier for people to save up for major life expenses like college.
Ksenia Yudina, founder & CEO, stepped down last month and warned the company was "insolvent."
Aside from the potential losses for investors, the situation is also worrying for UNest customers.
It has been an eventful few weeks behind the scenes at UNest, a startup that makes it easier for people to save up for major life expenses like college education, weddings and down payments for homes.
As Insider previously reported, Ksenia Yudina, founder & CEO, stepped down last month and warned the company was "insolvent."
She also accused some board members of voting for a hostile takeover of the troubled startup that was '"illegal and unethical," Insider reported last week.
It was a stunning collapse for a former fintech darling that had raised close to $40 million from big name investors including Artemis Fund, Anthos Capital, Franklin Templeton and Northwestern Mutual. The company also recruited celebrities like NBA All-Star Baron Davis and Laura Dern as "brand ambassadors."
Aside from the potential losses for investors, the situation is also worrying for UNest customers who have entrusted their nest eggs to the company. Here's what you need to know.
Is my money safe?
In one word: Yes.
"The financial health of UNest does not impact the security and status of any client funds," Michael Doniger, the company's chief operating officer, told Insider. "All client deposits and investments remain secure and continue to be invested in the existing portfolio options which include investments in Vanguard and Blackrock ETFs."
Where is my money being held?
Customer accounts are not held directly by UNest but rather are handled by Apex Clearing Corporation, according to UNest's terms and conditions.
Apex has provided the backend trading and clearing operations for other fintech companies, including Robinhood and SoFi.
Why is UNest in trouble?
It is not clear what exactly what went wrong at UNest.
What is certain is that many financial technology startups, which once represented one of hottest areas of venture capital, have struggled in the last two years as they have faced the duel headwinds of a lack of venture funding and skyrocketing interest rates.
More generally, some VCs have warned of a "mass extinction event" for startups as funding dries up and companies have a much harder time being acquired or going public. More than 500 startups have closed their doors so far this year, according to Crunchbase data.
What will happen to UNest?
Nothing has been announced but UNest has signed a term sheet with a new investor to be able to continue operations, according to Doniger.
"The board, remaining management, and investors are working closely together to secure additional funding for the company," he said. "The new partner also brings an experienced team of entrepreneurs and fintech leaders who will help guide UNest into its next chapter."
Do you have more information about UNest or other startups in trouble? Contact reporter Ben Bergman at bbergman@insider.com
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