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 going through monetary difficulties, the corporate confirmed to TechCrunch following a report by Axios.
Citing a letter from the board, Axios reported that the corporate is nearly out of cash, CEO Christine Hunsicker resigned from her CEO function 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 upset by the conduct that has led to this second. Our rapid focus is on addressing the corporate’s challenges, supporting our workers, and preserving the worth of our know-how and enterprise operations. We remorse having to quickly furlough our workers, however we consider this can greatest place the corporate to efficiently get well from our present state of affairs,” the corporate stated in an emailed assertion after TechCrunch inquired in regards to the firm’s standing.
CaaStle raised over $530 million complete, 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 no less than a number of 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 in opposition to the founder, this could be one of many largest such circumstances ever.
Last week, Charlie Javice, the founding father of scholar mortgage software 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 thrice as giant.
While this may not be a typical startup shutdown expertise, consultants have informed TechCrunch that 2025 is on observe to be one other brutal yr for failed startups.
