// STARTUP COMPARISON
Greensill Capital vs Wirecard
Greensill Capital failed in 2021 due to Fraud. Wirecard failed in 2020 due to Fraud. Both failed for the same reason — Fraud.
| METRIC | 🔥 Greensill Capital | 🔥 Wirecard |
|---|---|---|
| Sector | Fintech | Fintech |
| Country | UK | Germany |
| Founded | 2011 | 1999 |
| Died | 2021 | 2020 |
| Raised | $1.7B | Public (DAX) |
| Peak | $7B valuation | €24B market cap |
| Primary Cause | Fraud | Fraud |
// WHY EACH FAILED
🔥 Greensill Capital
Fraud
Greensill Capital provided supply-chain financing by buying invoices and bundling them as bonds sold via Credit Suisse funds. The model relied on trade credit insurance that was cancelled in March 2021. Without insurance the structure collapsed. Greensill filed for insolvency in March 2021. Credit Suisse lost $10B. Lex Greensill faced fraud investigations. David Cameron, who lobbied for Greensill, faced public scrutiny.
// LESSON
A business model with a single external dependency that can be cancelled overnight is a scheduled failure. Diversify or accept the concentration risk explicitly.
A business model with a single external dependency that can be cancelled overnight is a scheduled failure. Diversify or accept the concentration risk explicitly.
🔥 Wirecard
Fraud
Wirecard, a DAX-listed German payment processor, admitted in June 2020 that €1.9B supposedly held in Philippine bank accounts did not exist. Auditor EY had signed off for nine years. The Financial Times had raised doubts for years. CEO Markus Braun was arrested. COO Jan Marsalek fled to Russia and remains a fugitive.
// LESSON
A DAX listing is not due diligence. If cash balances cannot be independently verified, they do not exist. Auditors sign documents, not reality.
A DAX listing is not due diligence. If cash balances cannot be independently verified, they do not exist. Auditors sign documents, not reality.
// EXPLORE FURTHER