A six-year-old logistics startup that had raised millions of dollars from Goldman Sachs, SAP and other investors is shutting down, placing the blame on an embattled co-founder.
Originally headquartered in San Francisco, Slync relocated to Dallas in 2020 and raised millions of dollars to grow its logistics and automation software business.
A few years later, Slync's co-founder and now-former CEO Christopher Kirchner was charged by the Securities and Exchange Commission with defrauding investors and misappropriating millions of dollars after a Forbes investigation in 2022 reported allegations that Kirchner had overstated revenue figures and lived extravagantly on the company's dime.
Kirchner sued Slync in September over covering legal fees related to the SEC lawsuit, according to Law360,.
By mid-October, Slync had reportedly filed for bankruptcy and started preparing to liquidate its assets, according to the Journal of Commerce.
“We could not afford to grow the company and pay those legal fees at the same time,” Slync CEO John Urban told the Journal of Commerce. “It put the company in a position where we couldn’t raise capital from new investors and selling the company wasn’t an option,” either, because of liability concerns.
Slync and several of its investors did not respond to requests for comment.
"The company has not paid a cent of my legal bills to date," Kirchner wrote in an email, and directed the Business Times to comments he made to the Dallas Morning News, in which he said he "was actually personally covering company expenses and payroll" and strongly disputed assertions that he was "funneling money into my own account."
Kirchner also reportedly responded to the controversy on LinkedIn, claiming to be the victim of “a one-sided media narrative driven by incomplete facts and deliberate smear campaign orchestrated by the company that I founded and its board.” A LinkedIn profile for Kirchner did not display any recent publicly available posts.
The company had raised more than $24 million in fresh capital in February around the time that Kirchner was charged, and Urban described that round to Forbes at the time as “kind of cathartic, because for the first time we could all kind of exhale and say, ‘OK, this is the end of that chapter.’”
Forbes reported Slync's impending closure on Wednesday.
According to Forbes, a liquidation filing shows that Slync lost $80 million while generating only $1.7 million in revenue over three years between 2019 and 2022.
The company had raised more than $79 million in total funding from investors including Goldman Sachs, SAP, Plug and Play Tech Center, Gaingels, Hack VC and Blumberg Capital, among others, according to PitchBook.
