Food supply chain software maker Silo lays off ~30% of staff amid M&A discussions | TechCrunch

SiloA Bay Area Food Supply Chain Startup, has gone through a difficult period. The company laid off about 30% of its workforce, or more than two dozen employees, on Tuesday, TechCrunch has learned. Silo has confirmed the headcount cuts, clarifying that the cuts were across the board and not focused on individual departments.

Silo shared the following statement with TechCrunch regarding the layoffs:

We recently made the difficult decision to reduce our workforce by approximately 30%. We are committed to assisting impacted team members and have provided severance packages and recruiting assistance. At the same time, Silo remains dedicated to serving its customers and the perishable industry at large, and will continue to focus more aggressively on building the next generation of supply chain management software solutions.

Established in 2018, Silo’s platform helps automate Workflows for food and agri businesses and later expanded into other areas, such as accounts payable and receivable products, automation, inventory management, ledger accounting, financing and more.

The layoffs were due to an issue with a loan product that hurt Silo’s revenue. A company source confirmed that a customer had defaulted on their loan, causing Silo’s banking partner to pause the loan product. Silo then worked with the bank to resolve the issue with the customer so the facility would be able to be funded again.

Although Silo is now able to lend, the lack of payment from that customer and the overall pause in lending meant a decline in revenue for that period, leading to the layoffs. For this reason, Silo will be cautious about enhancing the lending product as it moves forward.

All of this happened in recent weeks. However, it is possible that if Silo had implemented more robust risk management processes, it would not have faced a default.

Additionally, we are hearing that Silo is engaged in M&A discussions as another possible solution to its current situation. The company had discussions with potential deal partners ahead of its Series C last year, but the fundraising allowed Silo to put those talks on hold for the time being. In recent weeks, M&A discussions have intensified again due to the new growth the company has seen over the past year, as well as the potential need for an exit.

Startup Raised $32 million in Series C funding Last summer. Investors include Initialized, Haystack, Tribe Capital, KDT, A16Z and others.