Skio’s $105M Acquisition: A Success Story of Efficient Funding

Skio, a startup founded by Kennan Frost, a college dropout and 2020 Y Combinator alum, has been acquired by its competitor Recharge, as announced by both companies on Thursday.

Skio and Recharge both specialize in providing subscription payment solutions for brands.

Although the official details of the acquisition were not disclosed in the press release, Frost revealed on X, LinkedIn, and Instagram that Skio received $105 million in cash from the deal, despite only raising $8 million from investors. This marked a significant return on investment for the startup.

Posts about the acquisition made by Frost were shared by Skio investors Y Combinator and Nicolas Wittenborn, the founder of VC firm Adjacent.

Frost had stepped away from running the company two years prior, as mentioned in a LinkedIn post by Skio’s current CEO, Aidan Thibodeaux, who initially served as the startup’s first COO. Thibodeaux highlighted the company’s focus on product development over marketing, advertising, or sales team expenses. He and the founding CTO, Andrew Chen, personally handled all sales calls.

Frost’s journey is particularly inspiring. In an Instagram post, he shared that he founded Skio after experiencing a panic attack that led him to resign from his engineering job at Pinterest. Shortly after, the COVID-19 pandemic struck.

Frost’s admission to Y Combinator was a turning point, as he initially struggled during the program until pivoting to the subscription payment concept. Within three years, Skio reached $10 million in annual recurring revenue (ARR) and became profitable. Frost credited a dedicated team for transforming early success into a sustainable business.

Gustaf Alströmer, Frost’s YC advisor, corroborated the sale details on X, commending Frost for his persistence despite challenges during the accelerator program.

At the time of the acquisition, Skio had achieved $32 million in ARR and processed $4 billion in payments. Frost has since moved on to his new venture, Icon, where he focuses on AdMaker, a tool for creating and monitoring ad campaigns.

Attempts to reach Frost, Recharge, and Wittenborn for comments were unsuccessful.