Bay Area food supply chain startup Silo is in trouble. TechCrunch has learned that the company laid off about 30% of its workforce, or more than 24 people, on Tuesday. Silo confirmed the layoffs and clarified that the cuts were across the board and not focused on individual departments.
Silo issued the following statement to TechCrunch regarding the layoffs:
We recently made the difficult decision to reduce our workforce by approximately 30%. We are committed to supporting affected team members and are offering severance packages and recruitment support. At the same time, Silo remains dedicated to serving our customers and the entire fresh food industry, and will focus even more agilely on building the next generation of supply chain management software solutions.
Founded in 2018, Silo's platform helps food and agriculture businesses automate workflows and has since expanded to other areas, including payables and receivables automation, inventory management, bookkeeping, financing and other payment products. Expanded.
Leading up to the layoffs were issues with lending products that had a negative impact on Silo's bottom line. Company officials confirmed that customers defaulted on their loans, which caused Silo's bank partners to suspend loan products. Silo then worked with the bank to resolve the customer's issue and the facility was able to receive funding again.
Silo can now make loans, but the lack of payments from its customers and a general halt in lending has led to lower revenue and job cuts in the period, so Silo is likely to be cautious about expanding its lending products.
All of this has happened in recent weeks, but Silo may not have defaulted if it had put in place stronger risk management processes.
Additionally, we have heard that Silo is in M&A discussions as a solution to the current situation. The company had been in talks with potential trading partners ahead of last year's Series C, but the funding allowed Silo to pause those talks. In recent weeks, M&A talks have reignited on the back of the company's renewed growth over the past year and a possible need for an exit.
The startup raised $32 million in Series C funding last summer. Investors include Initialized, Haystack, Tribe Capital, KDT, a16z, and more.