- GloriFi, a neobank billed as a bank for the “anti-woke,” is shutting down two months after its turbulent launch, according to a message posted on the platform’s website on Monday.
- The fintech, which had advertised itself as a banking platform for conservatives who view Wall Street as too liberal, laid off the majority of its staff, according to The Wall Street Journal, which first reported the startup’s shutdown, citing internal emails and people familiar with the matter.
- The platform’s closure follows an October story by the Wall Street Journal that detailed the Dallas-based firm’s chaotic start, including missed launch dates, workplace issues and vendor disputes. GloriFi founder Toby Neugebauer stepped down as CEO following the Journal report and became the firm’s executive chairman.
GloriFi failed to secure funding that would have carried it through the first quarter, Cathy Landtroop, the company’s chief marketing and communications officer wrote to employees in an email, seen by the Journal.
A message on the company’s website says GloriFi’s board of directors and leadership decided to wind down the company’s operations after encountering financial challenges related to “startup mistakes, reputation attacks, the declining economy, and multiple negative media stories.”
“We couldn’t be more thankful for our employees’ tireless efforts to bring this amazing product to market and our members and clients’ early trust, nor could we be more disappointed in the ultimate outcome,” the company said on its website. “Effective immediately, we have begun the process of helping our customers resolve their accounts. Look for more information and specific steps to follow within the next 24 hours. This is NOT a result of any action by you and we sincerely apologize for any inconvenience this may cause you.”
The startup, which did not respond to Banking Dive’s request for comment, launched in September with checking and savings accounts and planned to offer mortgages, brokerage accounts and insurance.
The company last year raised $50 million from a group of investors that included Ken Griffin, the founder and CEO of hedge fund Citadel, conservative billionaire Peter Thiel and former Georgia Republican Sen. Kelly Loeffler, among others.
In July the fintech announced plans to merge with special-purpose acquisition company DHC Acquisition Corp. in a deal valued at around $1.7 billion. That transaction required the startup to raise at least $60 million in additional cash, the Journal reported.
The platform’s mission was to serve a segment of the population that believes the majority of the nation’s financial institutions put too much emphasis on following liberal policies. This demographic wants to store their money in a bank that aligns with their conservative values, Neugebauer said.
“It is about my friends that played football at ‘Friday Night Lights.’ And they don’t feel loved. They don’t feel respected,” Neugebauer told the Wall Street Journal.
The company had plans to launch a homeowners insurance product that offered responsible gun owners a 10% discount, according to the Journal. The fintech’s executives also proposed offering coverage for a customer’s legal costs in the event they shot someone in self-defense, the publication reported.
Plans to use shell casing material for its credit cards were eventually dropped after the company realized the material could interfere with security chips and could be too thick for payment terminals, sources told the Journal.
The fintech partnered with Texas-based TransPecos Bank and Tennessee-based Evolve Bank to offer basic banking services, but had ambitions to purchase its own chartered institution in order to originate mortgages.
According to the Journal, an affiliate of GloriFi owned by Neugebauer and his wife, Melissa Neugebauer, entered into a deal to purchase a small bank in 2021. That transaction is pending regulatory approval, the publication reported.
The venture encountered operational issues over the summer, some of which stemmed from the firm’s use of Neugebauer’s Dallas home as its initial headquarters.
Vendors raised concerns with the setup, saying it was against security protocols to send consumers’ sensitive financial information to a private residence, sources told the Journal.
The firm eventually moved to a nearby office, but staff closest to Neugebauer continued to work from his home.
Employees reportedly complained about the work environment after witnessing Neugebauer’s volatile behavior and drinking habits, according to sources and a memo from the company’s former head of human resources, which was seen by the Journal.
Other issues that plagued the startup included a July lawsuit with technology vendor, EastBanc Technologies, which sued the firm for more than $2.4 million over unpaid invoices and fees.
GlofiFi filed a response in September in which it admitted it didn’t pay certain invoices, according to the Journal. The fintech also filed its own legal claim against EastBanc Technologies, accusing it of fraud and providing products that “were plagued with defects and unusable,” the Journal reported.