Jakob and Fabian Scholz’s crypto startup is reportedly insolvent. With Rubarb, the nephews of Chancellor Olaf Scholz originally wanted to make a big start in the financial world by saving on ETFs using an app. Since it was founded in 2020, around five million euros have been collected from rounds of financing. But now the end. The company cites a failed financing commitment as the cause of the bankruptcy. The Scholz nephews cannot hope for help from their prominent uncle.
Meanwhile, investors are outraged. In May, the company’s management announced that with cash funds of one million euros per month, it would lose 200,000 to 250,000 euros. “How can you run a fundraiser in February to the wall in less than five months,” commented an anonymous investor on the bankruptcy to the Handelsblatt.
After the business idea of an ETFsavings planapp did not bring any significant success, the Scholz nephews switched to crypto. The DeFi financial service Kudona was founded for this purpose. In cooperation with Fireblocks and Bankhaus Frick, customers were able to stake and lend cryptocurrencies. Fabian and Jakob Scholz and co-founder Kelvin Craig obtained a corresponding license in Lithuania. To generate the interest rate, Kudona converted customer funds into stablecoins and then deposited them on DeFi platforms. This means that returns of up to 3.8 percent were possible, according to the website of service.
In total, Rubarb employs around 30 people. It remains to be seen how things will continue for her. According to the Handelsblatt, almost half of the team should go. The subsidiary Kudona is meanwhile part of restructuring measures. The customer deposits of the crypto service are safe, according to Fabian Scholz.
Crypto winter is taking its toll
In the current market environment, the noose around numerous crypto companies is tightening. The liquidity problems at Celisus triggered a veritable domino effect, at the end of which several lending services had to file for bankruptcy. Additionally, Rubarb’s original idea is likely to be ETF-based savings planapp but also the competition with companies like Trade Republic must have been too great.
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