Synapse Financial Technologies
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Synapse (Synapse Financial Technologies, Inc.) was a San Francisco-based banking-as-a-service middleware company founded in 2014 by Sankaet Pathak and Bryan Keltner. It operated as the middleman and bookkeeper between fintech apps and traditional banks - providing APIs and software that let non-bank fintechs like Dave, Honey, Yotta, Juno, and Copper hold consumer deposits through partner banks including Evolve Bank & Trust, Lineage Bank, American Bank, and AMG National Trust. Backed by Andreessen Horowitz, it raised $51 million, had 100 fintech business relationships indirectly serving 10 million retail customers, and was one of the 100 fastest-growing US financial services companies in 2022. It filed for Chapter 11 bankruptcy in April 2024.
02 / Synapse Financial Technologies FAILURE REASONS
Failure reasons
Synapse's undoing was financial mismanagement at its core function: keeping the books. Discrepancies in its ledgers piled up through 2023 - the board discussed removing CEO Sankaet Pathak but a16z investors argued against it. Synapse failed to maintain accurate FBO (for-benefit-of) account records or reconcile customer accounts, so bank-held funds no longer matched what was owed to fintech users. When it filed Chapter 11 in April 2024, over $265 million in deposits across 100,000+ consumer accounts was frozen; bankruptcy trustee Jelena McWilliams estimated a $65-96 million shortfall between Synapse's records and the banks'. In August 2025 the CFPB sued over alleged mishandling of customer funds (estimated $60-90 million unrecovered). The promised FDIC protection never existed: Synapse was a non-bank, so depositor funds had no FDIC coverage against its own bankruptcy.
03 / EVENT HISTORY
Events in the structured record
- Company founded
Synapse was co-founded by Sankaet Pathak and Bryan Keltner as a banking-as-a-service platform connecting fintechs to banks.
- Ledger discrepancies
Discrepancies in Synapse's ledgers piled up; the board discussed removing CEO Sankaet Pathak, but Andreessen Horowitz investors argued against it.
- Chapter 11, then Chapter 7
In April 2024 Synapse filed for Chapter 11 bankruptcy; tens of thousands of users lost access to funds and over $265 million in deposits was frozen. A planned $9.7 million asset sale to TabaPay fell through, pushing the company toward Chapter 7 liquidation. Bankruptcy trustee Jelena McWilliams estimated a $65-96 million shortfall.
- CFPB lawsuit
In August 2025 the Consumer Financial Protection Bureau sued Synapse over alleged mishandling of customer funds, estimating $60-90 million in unrecovered funds.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
In April 2024 Synapse Financial Technologies filed for Chapter 11 bankruptcy protection; tens of thousands of US businesses and consumers lost access to services, with over $265 million in deposits across 100,000+ accounts frozen.
- 02
A planned $9.7 million asset sale to TabaPay fell through, pushing the company toward Chapter 7 liquidation; bankruptcy trustee Jelena McWilliams estimated a $65-96 million shortfall between Synapse's records and the banks'.
- 03
Client fintechs were forced to shutter - e.g., Mainvest closed permanently; Yotta's CEO reported 13,725 former customers lost money ($11.8M refunded against $64.9M in deposits).
- 04
In August 2025 the CFPB sued Synapse over alleged mishandling of customer funds, estimating $60-90 million in unrecovered funds.