Slync.io blames liquidity issues after employees go a month without pay

After initially blaming an internal administrative error for nonpayment of its North American employees for nearly a month, Dallas-based logistics technology startup Slync.io said Thursday that its “inability to liquidate funds in a timely manner” is the real reason for his ongoing nightmare. .

“The company’s recent payroll issues were the result of the company’s inability to timely liquidate funds from an otherwise attractive investment vehicle in order to make a recent payroll and not a lack of funding,” Jaime Reints, vice president of marketing at Slync.io, said in a statement to FreightWaves. “Due to the company’s inability to complete payroll, our payroll processor terminated its relationship with the company, further complicating our efforts to reinstate payroll.”

Slync.io maintains that it “always has been and remains a financially viable business”.

Logistics startup valued at $240 million

Over the past two years, Slync.io has raised over $70 million, including a $60 million Series B funding round led by venture capital firm Goldman Sachs Growth, ACME Ventures, 235 Capital Partners , Correlation Ventures and other existing investors, which closed in February 2021. .

Slync.io, a logistics visibility platform that works with shippers, 3PLs, and carriers, was co-founded in 2017 by Chris Kirchner, who serves as its chief executive officer, with Rajan Patel, the startup’s chief product officer, and Varun Dodla, its co-chief technology officer.

According to Pitchbook, the tech company has raised nearly $80 million since its inception and has nearly 100 employees.

Incorporated in Delaware, the $240 million San Francisco-based startup moved its headquarters to the Dallas-Fort Worth area in September 2020 but has remote employees across North America as well as in Hong Kong and Germany.

When first contacted by FreightWaves about unpaid employees, Kirchner called the reports “false.” A source close to the current payroll situation, who did not want to be named for fear of reprisal, said a number of employees had recently resigned or been laid off, which Kirchner also initially denied.

However, Reints confirmed late Wednesday that Slync.io had in fact laid off some of its staff, although she added that the job cuts were unrelated to the company’s financial health.

“While we have terminated some members of the Slync team, these terminations were not related to any financial issues as the company’s financial position remains strong,” Reints said.

While it’s unclear how many employees were affected by the month-long payroll issue, Reints said funds needed to pay employees have been liquidated and Slync has found a new payroll processor. .

“The process to ensure our employees receive all the payroll they are entitled to is very dynamic, which makes it difficult to provide accurate information at any given time,” Reints said.

The company is struggling to update its payroll after “experiencing unfortunate and unexpected liquidity and logistical issues,” Reints said.

Slync.io CEO Kirchner said the payment process for affected employees is already underway and will be “corrected in the coming days.”

When contacted by FreightWaves, a number of Slync.io employees declined to say whether they had received any of the back wages owed to them by the tech startup.

In addition to receiving $70 million in funding since the COVID-19 pandemic began in March 2020, Slync.io has also secured over $390,000 in funding through the Paycheck Protection Program (PPP). ) of the United States Small Business Administration.

According to Slync’s PPP loan application, which was approved by Silicon Valley Bank, the funds were used to save 20 jobs.

Forgivable lending through the PPP, administered by the Small Business Administration, began with $350 billion in the CARES Act signed by former President Donald Trump in late March 2020 and was increased in April 2020 with an additional $320 billion. . The third funding round, $284 billion in repayable PPP loans through the SBA, was opened to lenders in January 2021.

In an interview with FreightWaves after the $60 million Series B raise, Kirchner said the company plans to increase hiring and expects to add up to 130 employees by the end of 2021. .

However, that didn’t happen, according to a source familiar with the payroll situation at Slync. The company has added almost 30 employees – from 70 in 2021 to almost 100 in total in May. The source said it was unclear how many remained with the company after recent layoffs and rumors that others were leaving the company for not being paid.

Slync.io late in paying sports sponsors

More than a year after the Dallas Stars, a professional hockey team, announced Slync.io as its official logistics partner, the company has failed to honor its arranged payments and is several months behind on its sponsorship, owing to the Stars approximately $800,000. Athletic reported for the first time.

Slync.io’s Reints declined to comment on the company’s contractual relationship with the Stars over claims the logistics company hasn’t paid the NHL team for months.

“All of our contracts are confidential and we cannot comment on public speculation,” she said.

At press time, the Dallas Stars media team had not responded to FreightWaves’ request for comment on whether Slync.io was up to date on its sponsorship payments to the NHL team.

In January, Norwegian golfer Viktor Hovland won the Slync.io Dubai Desert Classic 2022, four months after the tech company was named by the European Tour as its new title sponsor. The prize money for the event was $8 million.

Tech CEO withdraws bid for England football team

According to Reuters, Kirchner withdrew his offer in mid-June to personally buy Derby County, an English football team, two months after being named preferred bidder. The outlet reported that Kirchner missed the English Football League’s June 10 deadline to complete the purchase.

Reints declined to comment on Kirchner’s failed bid to buy the team.

“Mr. Kirchner’s personal assets are irrelevant to Slync,” she said.

This is a developing story.

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Disclosure: Slync.io was named to FreightWaves’ 2022 FreightTech 100 list in November.

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