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 function and the board, and the corporate has concerned legislation enforcement to research alleged monetary misconduct.
The corporate additionally confirmed to TechCrunch that it furloughed all of its staff.
“The Board is deeply disillusioned 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 briefly furlough our staff, however we imagine it will greatest place the corporate to efficiently get well from our present scenario,” the corporate mentioned in an emailed assertion after TechCrunch inquired concerning 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 a few of the firm’s traders about monetary efficiency, and concerning 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 concerning 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.
Final 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 client rely. However the funding numbers for CaaStle are 3 times as massive.
Whereas this may not be a typical startup shutdown expertise, consultants have instructed TechCrunch that 2025 is on observe to be one other brutal yr for failed startups.
