JPMorgan paid $175 million for 4.25 million users. Under 300,000 were real.
JPMorgan paid $175 million for Frank in 2021. 70% of emails to about 400,000 supposed customers bounced. The founder was sentenced to 85 months. If a deal rests on a number only the seller controls, check it.
Transcript
70% of the emails bounced. JPMorgan had sent them to about 400,000 customers of a startup it had bought.
In September 2021, JPMorgan paid $175 million for Frank, a college-aid startup. The whole thesis was its customer base: millions of young people the bank hoped to turn into checking accounts.
Frank's founder, Charlie Javice, had inflated the customer count from fewer than 300,000 real users to a claimed 4.25 million. JPMorgan sued in March 2023. She was later sentenced to 85 months in prison.
JPMorgan's other fintech buys, WePay and Nutmeg, sold things it could verify: working code, regulated assets. Frank sold a number. If a deal rests on a figure only the seller can produce, check it yourself first.
The records behind this video
Every figure in the video comes from this Decision Record, each with its sources.
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