Silo, a Bay Area food supply chain startup, is having a tough time. TechCrunch has learned that on Tuesday, the company laid off about 30% of its staff, or north of two dozen employees. Silo confirmed the job cuts, explaining that the cuts were general in nature and didn’t apply to individual departments.
Silo shared the following statement with TechCrunch regarding the layoffs:
We recently made the difficult decision to scale back our workforce by almost 30%. We are committed to supporting those team members who are affected, which is why we have provided severance packages and recruitment support. At the same time, Silo stays committed to serving our customers and the entire perishables industry and will proceed to focus on building next-generation supply chain management software solutions.
Founded in 2018, the Silo platform helps automate workflows in food and agriculture corporations and later expanded to other areas reminiscent of payment products for automating payables and receivables, inventory management, accounting, financing and more.
Before the layoffs, there was an issue with the loan product that hurt Silo’s revenues. An organization source confirmed that the customer was in default on loan repayments, which resulted in Silo’s banking partner suspending the loan. Silo then worked with the bank to resolve the issue with the customer so that the facility was in a position to be re-financed.
Although Silo is now in a position to make loans, the lack of payments from this customer and the general pause in lending meant a decline in revenue during this era, resulting in redundancies. For this reason, Silo is prone to be cautious about increasing the level of its lending product because it develops.
Everything happened in recent weeks. However, it is possible that if Silo had implemented stronger risk management processes, it could not have been at risk of default.
Additionally, we hear that Silo is engaged in merger and acquisition discussions, which is one other possible solution to the current situation. The company had previously been in talks with potential transaction partners ahead of last yr’s Series C, but the fundraising allowed Silo to temporarily put those talks on hold. M&A discussions have picked up again in recent weeks amid the latest growth the company has experienced in the past yr, in addition to a possible need for an exit.
Last summer, the startup raised $32 million in Series C funding. Investors include Initialized, Haystack, Tribe Capital, KDT, a16z and others.