Finance

Law firm Charles Russell Speechlys pursues celebrity fintech Lanistar over unpaid debt

Celebrity fintech Lanistar is being pursued by a law firm over an unpaid debt, marking the latest blow in a series of setbacks for the startup as it raises fresh funding.

Lawyers acting for law firm Charles Russell Speechlys filed a claim against Lanistar on 9 June, court records show.

Charles Russell Speechlys is being represented by specialist debt recovery law firm Goldsmith Bowers Solicitors, according to the court filing. Charles Russell Speechlys declined to comment.

A spokesperson for Lanistar said the startup had recently secured “significant funding” from investors and said it expects the law firm’s claim to be “completely resolved within a matter of days”.

“We are finalising a payment plan with CRS, which was agreed prior to the claim being made. It was raised automatically and is now being withdrawn as payment terms have been agreed,” the spokesperson added.

READ Celebrity fintech Lanistar breaches advertising rules as ‘misleading’ security claims continue

Digital banking startup Lanistar has been beset with regulatory difficulties in its short lifespan.

The Financial Conduct Authority issued a consumer warning in November stating the firm had been carrying out activities without proper authorisation, but removed the warning days later after talks with Lanistar. The startup gained authorisation as an electronic money agent from the FCA in May. This permitted it to use third-party licences to carry out payment and banking activities.

Last year the Advertising Standards Authority said it was investigating several complaints it had received about Lanistar’s influencer marketing campaign, in which it had offered more than 3,000 creators globally a slice of equity in the company in exchange for promoting its upcoming payment card.

Meanwhile, the ASA ruled last month that separate promotions by Lanistar — which said its Volt payment cards featuring a keypad and one-time PIN were “the world’s most secure” — were misleading and must not be made again

Lanistar opened a waiting list for the Volt cards in October, mounting a promotional blitz by celebrity influencers, including prominent footballers, Netflix stars and models, to advertise a January launch date. However, the cards have yet to materialise, with the company stating they now expect to launch them in the next six months.

Lanistar has also experienced problems with paying staff salaries on time, Sifted reported in February

READ FCA U-turns and removes warning against London fintech Lanistar after talks

The report said staff in the firm’s North Macedonia support hub were paid late in December, with the business blaming banking complications and Covid-19 for the delay.

The firm also cut at least 40 staff members across December and January, according to the report. In a statement in April, Lanistar said it has more than 100 employees across offices in the UK, North Macedonia and Greece.

To date Lanistar has received £15m in external funding, attributed to investment from family and friends last summer. In July, the startup said the investment had come from a venture capital firm called Milaya Capital.

A now-deleted 21 May report by news website TechBullion, seen by Financial News, claimed the startup was set to raise £50m in a Series A round later this year, valuing Lanistar at £500m. The round was said to be led by Silicon Valley Partners, an advisory firm in California. Silicon Valley Partners told Financial News it has no involvement with the company, and does not make such investments.

To contact the author of this story with feedback or news, email James Booth

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