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Why Plastiq Decided to Shut Down Nearside After a $130 Million Deal?

Why Plastiq Decided to Shut Down Nearside After a $130 Million Deal?

In the world of fintech startups, few stories have been as intriguing and puzzling as the rise and fall of Plastiq, a San Francisco-based lending and payments startup. Plastiq gained fame for its innovative approach, allowing small businesses to pay their bills with a credit card, providing much-needed flexibility in managing cash flows. 

However, in a twist of fate, the company found itself in a financial quagmire, eventually leading to its decision to shut down Nearside, a digital bank for small businesses, just two months after a substantial $130 million acquisition.

The Pandemic’s Impact on Plastiq

The global COVID-19 pandemic wreaked havoc on the business landscape, affecting countless companies worldwide, and Plastiq was no exception. The pandemic disrupted businesses across industries, and Plastiq’s primary customers, small businesses, were among the hardest hit. 

Many of its clients struggled to maintain operations, let alone pay their bills using Plastiq’s services. The adverse economic conditions took a toll on Plastiq’s revenue, creating a challenging environment for the company.

The Nearside Acquisition

In September 2022, Plastiq made a significant move by acquiring Nearside, a digital bank tailored to the needs of small businesses. The acquisition came with an announced price tag of $130 million, but an interesting discrepancy emerged. 

According to the bankruptcy filing, Plastiq actually bought Nearside for about $60 million, with the bulk of the payment made in stock. The reasons behind this inconsistency remain unclear, but what is certain is that Plastiq received a substantial cash infusion from Nearside’s balance sheet as part of the deal.

The Sudden Shutdown of Nearside

Despite the cash injection, the Plastiq-Nearside marriage turned sour remarkably quickly. Just two months after the acquisition, Plastiq made the shocking decision to shut down Nearside. According to the bankruptcy filing, Plastiq cited concerns over Nearside’s technology, security and controls as the primary reason for this abrupt move. 

They believed Nearside’s offerings were not up to par for Plastiq’s customers.

However, this decision raised eyebrows and suspicions. A former Nearside executive disputed Plastiq’s claims, suggesting that Plastiq may have been more interested in Nearside’s cash reserves from the outset. 

The controversy surrounding the Nearside acquisition and shutdown only added to the intrigue surrounding Plastiq’s downfall.

The Aftermath: ZilMoney Emerges as a Popular Choice

With Plastiq’s bankruptcy and the controversial Nearside acquisition dominating headlines, small businesses found themselves in need of an alternative solution for their payment needs. This is where ZilMoney, another fintech player, stepped into the spotlight.

ZilMoney quickly gained traction as a popular choice for small businesses seeking a reliable and secure payroll by credit card payments. Known for its user-friendly interface, robust security measures, and seamless integration with existing financial systems, ZilMoney filled the void left by Plastiq’s departure from the market.


The rise and fall of Plastiq serve as a cautionary tale in the fast-paced world of fintech startups. The COVID-19 pandemic’s impact on businesses, coupled with the enigmatic Nearside acquisition and subsequent shutdown, led to Plastiq’s demise. 

As small businesses continue to adapt to changing financial landscapes, innovative solutions like ZilMoney emerge to address their payment needs, ensuring that the world of fintech remains dynamic and ever-evolving.

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