HSBC fraud concerns trigger collapse of fintech Stenn

A prominent financial technology firm has been placed into administration following serious allegations of potential fraudulent activity discovered by HSBC Holdings Plc.

Stenn Technologies, a London-based invoice financing company that claimed a valuation of $900 million in 2022, saw its UK operating companies enter administration on 4 December after HSBC raised significant concerns about irregularities in its transactions.

The dramatic downfall comes after sources close to the matter revealed that the company’s founder and CEO, Greg Karpovsky, left the country last week under uncertain circumstances. Despite attending an all-company video conference call last Wednesday, his precise location remained unknown to employees.

Founded in 2015, Stenn specialised in providing funding to small businesses by purchasing outstanding invoices. The firm had attracted substantial investment, including a $50 million funding round from Centerbridge Partners LP in 2022, which brought its valuation close to unicorn status.

The company had previously boasted impressive credentials, claiming to have financed over 800 businesses with more than US$20 billion in transactions. In July, it was even recognised as one of CNBC’s top 250 global fintech companies.

Key financial institutions had been involved with Stenn, including Citigroup, which began collaborating with the firm in 2022 to finance supply chain businesses. Other senior lenders participating in the company’s securitisation programmes included Barclays Plc, Natixis, and Crayhill Capital Management LP.

HSBC Innovation Bank, previously known as Silicon Valley Bank’s UK arm, had provided Stenn with a revolving credit facility, according to documents filed at Companies House.

Neither HSBC nor Stenn’s representatives have provided extensive commentary on the situation. A spokesman for Interpath, the administrators appointed to Stenn last week, declined to comment beyond their initial appointment statement.

The collapse highlights potential risks in the rapidly evolving fintech sector, where innovative financing models can sometimes mask underlying financial irregularities.

Approached for comment, representatives from Centerbridge, Citigroup, Crayhill, Barclays, and Natixis either declined to comment or did not immediately respond to requests for information.

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