Happy Sunday, friends. Here in the US this was Thanksgiving week (here’s hoping our US-based friends had a great holiday with family and friends). But it was notable for another reason too: Pipe’s frontman/CEO, Harry Hurst, and his cofounders are stepping back amid a sudden reshuffling of the management team. 

Wait, what? You might remember Pipe as one of the splashiest (and spendiest) alternative capital startups of the past couple years. You might be followed by their retargeting across all of your favorite social platforms too. You might also remember that they pretend their invoice factoring product is new, innovative, and useful to entrepreneurs. (It’s none of those things.) 

What happened…or what is happening at Pipe? I don’t know, but this causes me to wonder a couple of things... 

First, is their portfolio in trouble and they need to shore it up in order to continue? And will a seasoned financial services/debt platform CEO help them with that? This would not be a huge surprise, since a growth at all costs approach to lending can definitely lead to portfolio losses. (Make no mistake, while Pipe claims not to be a lender, they are. If you give someone money and expect them to pay it back and make a profit, that’s lending.)

And if it’s not the portfolio, is it customer attrition and growth? That is, are customers leaving the Pipe platform faster than they are joining today? I wondered all along why companies would sign up for a 12-month payback period and a product that I regard as extractive. Maybe their customers are walking away having figured out that the sexy brand doesn’t mean it’s a good product.

Or maybe this was the plan along? Was the idea to grow a company with as many customers signed up as possible, but with a revenue model delivering de minimis value, and then to bring a seasoned asset management CEO to build from this point? Perhaps the idea was that the customer base could be monetized and loan portfolio right-sized at some point?

Then there are slightly more nefarious ideas being shared out there. This comes from a now-deleted tweet shared via Dave Friedman’s newsletter, but did something more dramatic happen? Huge BTC losses? Millions of dollars taken off the table in secondaries? Here’s an article from Forbes with slightly less outlandish details but a similar set of themes. 

Separately, how does this affect the fundraising universe? Here’s a tweet from Bryce Roberts about Pipe’s VCs. For how long did they know this was coming, and how many of them continued to raise new funds partially on the paper markup that Pipe represents in their portfolios? 

It’s difficult to know what happened, or what will happen next, but I have a feeling we’ll hear more about this in the next couple weeks. Stay tuned, and buckle up.