CaaStle, a startup that launched in 2011 as a plus-sized clothes subscription service and later grew to become a list monetization platform for clothes retailers, is dealing with monetary difficulties, the corporate confirmed to TechCrunch following a report by Axios.
Citing a letter from the board, Axios reported that the corporate is sort of out of cash, CEO Christine Hunsicker resigned from her CEO position and the board, and the corporate has concerned legislation enforcement to analyze alleged monetary misconduct.
The firm additionally confirmed to TechCrunch that it furloughed all of its workers.
“The Board is deeply disappointed by the conduct that has led to this moment. Our immediate focus is on addressing the company’s challenges, supporting our employees, and preserving the value of our technology and business operations. We regret having to temporarily furlough our employees, but we believe this will best position the company to successfully recover from our current situation,” the corporate stated in an emailed assertion after TechCrunch inquired in regards to the firm’s standing.
CaaStle raised over $530 million whole, with its final spherical raised in 2019 at $43 million, PitchBook estimates.
In that letter, additionally cited by Puck, the board is alleging that Hunsicker misled not less than among the firm’s buyers about monetary efficiency, and in regards to the firm’s capital and excellent shares, together with two “falsified” audit opinions.
Both Axios and Puck have reported that days earlier than Hunsicker exited the corporate, she was out fundraising, and making claims in regards to the firm’s wholesome funds.
Axios has famous that if the board’s allegations result in a case of fraud made towards the founder, this is able to be one of many largest such instances ever.
Last week, Charlie Javice, the founding father of pupil mortgage utility startup Frank, which was bought by JPMorgan for $175 million, was discovered responsible of defrauding the financial institution. The financial institution claimed Javice inflated the shopper rely. But the funding numbers for CaaStle are 3 times as massive.
While this won’t be a typical startup shutdown expertise, consultants have informed TechCrunch that 2025 is on monitor to be one other brutal 12 months for failed startups.
