CaaStle, a startup that launched in 2011 as a plus-sized clothes subscription service and later turned 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 nearly out of cash, CEO Christine Hunsicker resigned from her CEO position and the board, and the corporate has concerned regulation enforcement to research alleged monetary misconduct.
The corporate additionally confirmed to TechCrunch that it furloughed all of its staff.
“The Board is deeply dissatisfied by the conduct that has led to this second. Our instant focus is on addressing the corporate’s challenges, supporting our staff, and preserving the worth of our expertise and enterprise operations. We remorse having to quickly furlough our staff, however we imagine it will 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.
Each 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 is able to be one of many largest such circumstances ever.
Final 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 client rely. However the funding numbers for CaaStle are 3 times as giant.
Whereas this may not be a typical startup shutdown expertise, consultants have advised TechCrunch that 2025 is on monitor to be one other brutal 12 months for failed startups.