It’s not fun when your start-up is denounced as a failure and Frank has just been dropped, after an acquisition that cost a whopping $175 million dollars.
JPMorgan Chase acquired Frank in September 2021 to help it deepen relationships with college students, but has now shut down the service.
The bank shut down the website for the college financial aid platform after alleging that the company’s founder created nearly 4 million fake customer accounts. JPMorgan said it learned the truth after sending out marketing emails to a batch of 400,000 Frank customers.
About 70% of the emails bounced back, indicating that someone at Frank had been cooking the books quite a bit! When selling businesses based on their performance, traffic, or existing customer base, these key metrics should be verifiable. In this case, the numbers did not match, apparently.
Frank operated from the domain name WithFrank.org. You can read about the case and ongoing lawsuit here.
Never understimate the power of stupidity