Silo, a Bay Area startup focused on the food supply chain, has encountered a challenging period. The company recently laid off about 30% of its workforce, impacting over two dozen employees. Silo confirmed that these cuts were made across various departments.
Silo issued the following statement regarding the layoffs:
We recently made the difficult decision to reduce our headcount by almost 30%. We are committed to supporting those team members impacted and have provided severance packages and recruiting support. At the same time, Silo remains dedicated to serving our customers and the perishables industry at large, and will continue to focus more nimbly on building next-generation supply chain management software solutions.
Founded in 2018, Silo’s platform aims to automate the workflows of food and agricultural businesses, later expanding into various areas like accounts payable and receivable automation, inventory management, ledger accounting, financing, and more.
The layoffs followed an issue with a lending product that negatively affected Silo’s revenue. A source within the company confirmed that a customer had defaulted on their loan, prompting Silo’s banking partner to halt the loan product. Silo worked with the bank to resolve the issue with the customer, allowing the funding facility to operate again.
Despite resuming its lending activities, the default and subsequent pause in lending resulted in decreased revenue, leading to the recent layoffs. Moving forward, Silo is expected to adopt a cautious approach to ramping up its lending product.
These events transpired in recent weeks, but stronger risk management processes might have prevented the default situation.
Additionally, Silo is reportedly in M&A discussions as it seeks potential resolutions to its current challenges. The company had previously engaged in such talks ahead of its Series C last year but paused them following the fundraise. Recently, these discussions have resumed, spurred by the company’s growth last year and potential need for an exit.
The startup raised $32 million in Series C funding last summer, with investors including Initialized, Haystack, Tribe Capital, KDT, a16z, and others.
