Skio, a 2020 Y Combinator alum founded by self-described college dropout Kennan Frost, has been acquired by competitor Recharge, the companies announced on Thursday. Both Skio and Recharge make products that handle subscription payments for brands - because apparently, managing recurring charges for overpriced coffee beans and dog toy boxes is a lucrative business.
While the official press release did not disclose the terms of the deal, Frost (who had previously left the company) posted on X, LinkedIn, and Instagram that his startup walked with $105 million cash and had only raised $8 million from investors. That's a healthy return by any measure, unless you count the panic attack that started it all.
Frost's story is stirring, in the way a rollercoaster ride is - terrifying, then exhilarating, then you buy merch. He solo-founded the startup after having a panic attack that caused him to leave his job as an engineer at Pinterest. COVID shut the world down two weeks later. Frost got into YC and says in another post that he "completely failed during the batch" until he pivoted to a subscription idea. In three years, he got the company to $10 million in ARR and, he says, profitable. Then another team came together and turned this early traction into a real company.
At the time of the sale, the company was at $32 million ARR and had processed $4 billion in payments. Not bad for a pivot born from a panic attack and a pandemic.
Frost's posts about the deal were reposted by Skio investors Y Combinator and Nicolas Wittenborn, founder of VC firm Adjacent. His YC advisor, Gustaf Alströmer, confirmed the terms of the sale on X, describing how the founder struggled during his time at the accelerator but never gave up.
Frost had not been running the company for about two years, according to a LinkedIn post by Skio's current CEO, Aidan Thibodeaux, who began as the startup's first COO. When he took over, he described a grind that involved no spend on marketing, ads, or a sales team. Instead, they focused spending exclusively on building the product. He and the founding CTO, Andrew Chen, made every sales call themselves.
Frost is now working on another startup he founded, Icon, which offers a product called AdMaker for generating ads and tracking ad campaigns. Because apparently, once you've built a subscription-payment unicorn, the next step is trying to automate the ads that sell the subscriptions.
Frost, Recharge, and Wittenborn could not be immediately reached for comment, presumably because they're busy counting cash or having panic attacks about their next ventures.