Feb 24, 2023

FreightWaves Click to close the product launchpad Home / News / Business /Slync lands $24M in fresh funding after tumultuous 2022 Will new leadership be enough to save the FreightTech company? Slync.io announces new funding from previous investors. (Photo: Jim Allen/FreightWaves) After nine months filled with liquidity issues, executive replacements and fraud charges filed against one of its co-founders, logistics technology provider Slync.io announced Thursday it has secured new funding from past investors. According to the Securities and Exchange Commission filings, on Feb. 15, one day after former CEO and co-founder Chris Kirchner was charged with fraud by the SEC and the U.S. Department of Justice, Slync.io raised $24 million in new capital, led by Goldman Sachs with participation from Blumberg Capital, ACME Ventures and Gaingels. Funding details Business goals for the round Investments in new tech and new hires in all business functions Total funding *Pitchbook data Slync’s technology offers two leading solutions that leverage process automation for global shippers. Intelligent Carrier Management helps automate the container booking process. Intelligent Order Orchestration is an enterprise resource planning system that automates the workflows related to creating, tracking and servicing customer orders. With its new capital, Slync plans to continue scaling the company including, “investments in innovation, as well as new hires across functional areas,” Greg Kefer, chief marketing officer of Slync, told FreightWaves. Incorporated in Delaware, the San Francisco-based startup moved its headquarters to the Dallas-Fort Worth area in September 2020 but has remote employees throughout North America as well as in Hong Kong and Germany. According to PitchBook, Slync currently has an estimated 54 employees, down from its high of over 100 workers in June 2022 when many former employees were forced to find new jobs after going for more than two months without being paid. Kefer said the company is unable to comment on its employee count or turnover stemming from the alleged mismanagement of funds by Kirchner. “Despite the actions of the ex-CEO, a sizable team remains at the company,” Kefer said. “Feedback from the team has been great since John Urban took over as CEO last fall.” Former Slync CEO Kirchner was charged with wire fraud on Feb. 14 after the SEC and the DOJ filed criminal complaints alleging he lied to investors and misappropriated over $28 million from the FreightTech company he helped launch in 2017 to fund his lavish lifestyle. According to the SEC complaint, from January 2020 through May 2021, Kirchner raised approximately $67 million from two rounds of capital fundraising, including the $60 million Series B funding round that closed in February 2021 and was led by venture firms Goldman Sachs Growth , ACME Ventures, 235 Capital Partners, Correlation Ventures and other existing investors. “We allege that Kirchner lied about Slync’s business to secure tens of millions of dollars from investors, a massive portion of which he then stole from the company to live extravagantly while not paying Slync’s employees,” said Sheldon L. Pollock, associate director of the SEC’s New York regional office, in a statement . Soon after the company received the $60 million in 2021, Kirchner bought a 2010 Gulfstream G550 jet for about $15 million, court filings in a wrongful termination lawsuit by a former Slync vice president claim. Kirchner’s personal investment entity, KFIM LLC, was also named in the complaint. Investigators claim Kirchner formed the entity in November 2020 “primarily to purchase a private jet for his personal use and to hold certain assets that [Kirchner] misappropriated from investors in the Series B raise.” The Delaware-based company lists Kirchner as owning 51%, and his wife, Alyssa Beth Kirchner, as owning 49% of KFIM. His wife has not been charged. In January, the jet was sold for an undisclosed amount. Kefer confirmed that two of Slync’s co-founders, Raj Patel and Varun Dodla, remain with the company but declined to disclose how many clients Slync currently has, citing “contractual obligations [that] prevent [Slync] from sharing specifics around customers.” “We do have several who plan to support additional public announcements of their use and satisfaction with Slync’s technology,” Kefer said. After Kirchner’s firing in August, investors, led by Goldman Sachs, which has a seat on Slync’s board of directors, agreed to inject more funding to pay Slync’s employees. However, Mary Athridge, a spokesperson with Goldman Sachs Asset Management, declined to comment on the amount owed to employees at the time. When asked about the $24 million fundraise, Athridge deferred questions to Kefer. As part of Goldman Sachs’ policy, the company doesn’t comment “beyond what we say in press releases related to our portfolio investments,” she said. Darren Cohen, a partner at Goldman Sachs, said in the release, “During the COVID pandemic, loaded container ships anchored offshore and empty store shelves showed everyone what happens when the international supply chain breaks down. We believe the Slync platform provides an innovative solution that brings the global logistics industry fully into the digital realm. The value of this technology is significant in our opinion.” Nonetheless, a FreightTech industry insider said it’s disappointing that Goldman Sachs and other investors in Slync haven’t commented publicly on the alleged fraud charges filed against Kirchner. “Kirchner’s [alleged] behavior hurts investors, employees and the startup market as a whole,” a source familiar with the situation at Slync told FreightWaves. Will FreightTech save Slync? Bart De Muynck, industry technology expert and chief industry officer of project44, anticipates Slync’s future is bright if the company can focus on its technology’s utility. “I think Slync always had a great opportunity for strong growth but honestly was mismanaged. And it isn’t because they had a bad CEO who did bad things, that they don’t have an opportunity in the market,” he said. “The two biggest things a company needs are a good solution for a large industry problem and a great team to go to market, sell and implement that solution. I believe that Slync now has both with a very experienced management team. In my view, it is almost too much horsepower for such a small company, but that will only help them accelerate faster,” De Muynck said. Do you have a news tip to share? Send Clarissa Hawes an  email  or message her  @cage_writer  on Twitter. Your name will not be used without your permission. Watch now: Former Slync CEO charged with fraud Read more