A financial technology startup launched by former PayPal and Intuit CEO Bill Harris has folded after less than a month in business.
According to its website, "Nirvana Money's service is being discontinued" and all accounts will be closed on Dec. 1.
The closure comes only weeks after the startup officially launched in late October. Founder and CEO Harris moved to Miami last year to start the company, a credit card, bank account and rewards program for middle-income earners. At the time, he told the Business Journal he planned to hire up to 200 employees in the area by the end of 2022.
Nirvana Money had at least a dozen employees. A representative for the company did not return a request for comment. Harris also did not immediately respond to a request for comment.
In an email to employees, Harris said external factors such as rising interest rates and worsening economic outlook led to the closure.
"These changes hit fintechs particularly hard, and many of the strongest companies have already reduced their workforce," the message said. "Valuations of public fintechs are down 60%, and the impact on young companies is at least as harsh."
The company also ran into obstacles when it embarked on market testing. The credit quality of many people who enrolled was too low for the firm to offer an immediate credit line, Harris said. That contributed to "problematic" levels of fraud and misuse.
In addition, the proportion of enrolled customers who become active card users did not meet expectations.
"This makes our cost of acquisition and unit economics – the marginal revenue and expense generated by each new customer – unsustainable," Harris said in the email.
Nirvana Money is closing all existing accounts, returning customer funds and shutting down by the end of the year. Every employee will remain on the payroll until Dec. 31 and will receive five weeks of severance pay, the email said. Anyone who relocated to Miami for their jobs will receive an additional four weeks of severance pay.
The startup was still making new hires in the weeks before its closure, according to an employee who spoke to the Business Journal on background.
"It's frustrating and disappointing," the source said. "You're telling me you couldn't have predicted that this would happen?"
The source noted that Nirvana Money is working with employees to connect them with jobs at other businesses.
"I have to give credit to Bill Harris for the work he's doing to place people at new companies," the employee said.
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