Logistics startup Slync raises $24 million, tries to distance itself from disgraced founder

Start-up of software for supply chain management Slyncwhich was once valued at $240 million has not had an easy time of late.

Slync founder Christopher Kirchner was charged by the Justice Department and the Securities and Exchange Commission (SEC) this month for embezzling $20 million from the company to fund lavish lifestyles, including a $16 million private Gulfstream jet, professional golf tournaments, a $495,000 luxury suite in a local sports stadium and failed bids for English football clubs. He told private bankers that the $20 million, which amounted to 40% of the $50 million Slync raised from angels and venture firms, represented “a distribution of my company” — a distribution that Slync’s board of directors never approved. approved.

In the meantime, some of the Slync staff months without paying. The company was behind on payments to suppliers and also to the NHL’s Dallas Stars – which Slync sponsored at the time. During all this, the startup lost its Chief Marketing Officer, Chief Revenue Officer, and Chief Financial Officer.

Understandably, Slync has made a concerted effort to distance itself from Kirchner – and seemingly it’s met with some success. According to to filings with the SEC, Slync raised approximately $24 million in January – a combination of equity and debt. We reached out to the company for more information and Greg Kefer, the chief marketing officer, agreed to an email interview.

Kefer immediately declined to answer questions about Kirchner, except that he was suspended from his position as CEO of Slync in 2022. Kefer referred me to this statement:

We are aware of FBI activity related to an ongoing federal investigation into the personal activities of former Slync CEO Christopher S. Kirchner… Slync is cooperating with the government in its investigations and looking, as a victim of Christopher Kirchners actions, looking forward to a just resolution of this matter. This research is not the primary focus of the company. We have moved on with our new CEO, John Urban, and are focused on delivering next-generation technology to the global logistics industry.

Kefer announced that Goldman Sachs led Slync’s latest round (with participation from Blumberg Capital, ACME Ventures, Gaingels) and “remains committed to Slync’s value proposition” despite the recent turmoil. He also said the company has plans to “substantially” expand the team over the next year and that annual recurring revenue is “growing rapidly”, though he would not reveal the size of Slync’s customer base.

Kefer claims the new money will be spent primarily on “expanding the scope” of Slync’s technology beyond container freight, air freight and specialty freight processes – its current focus. To date, Slync has raised a total of more than $100 million in venture capital and equity capital, excluding a loan it received as part of the U.S. Small Business Administration’s Salary Protection Program.

“The fact that we just raised $24 million obviously helps us a lot to survive in the months ahead,” said Kefer. “But this infusion of funds is also an indication that our investment partners see the potential in Slync’s technology.”

So what is Slync’s technology?

At a high level, Slync connects disparate shipping and logistics systems, ingesting and processing data to (ideally) automate various repetitive processes. Drawing on a range of data sources, including enterprise resource management systems, customer relationship management systems and transportation management systems, visibility service providers, email, PDFs and spreadsheets, Slync seeks to highlight important information to users through collaboration tools and role-based workflows for communicating and sharing that info.

“Slync provides a technology platform that enables major global shippers to finally end the manual processes that still plague the logistics industry. There’s a lot of technology out there, and that’s part of the problem, because it’s created disconnected silos of data and operational tools,” Kefer said.

But many startups are doing the same. At one estimationthe market for supply chain management software was estimated to reach $15.8 billion by 2022.

Tive and Altana, companies developing supply chain visibility tools, recently raised $54 million and $100 million, respectively. The supplier experience management platform HICX brought in $30 million not long after, and FourKites — which helps manage global freight shipments — received its own recent $30 million tranche as part of a previously announced strategic partnership with FedEx.

Kefer states that Slync can stand out – and succeed – in the crowded field, but color me skeptical. Aside from the fact that hiring can be challenging given the company’s historical payroll problems, Slync’s latest tranche of funding was only a fraction of the size of the previous fully-equity tranche — suggesting that Kirchner is casting a long shadow. And while logistics companies use the VC dear ones from 2021 to mid 2022, funding has slowed significantly From that moment on.

For what it’s worth (and to Kefer’s earlier point), Goldman Sachs hasn’t gone away. Darren Cohen, a partner there, had this to say when contacted for comment:

“During the COVID pandemic, loaded container ships anchored offshore and empty store shelves showed everyone what happens when the international supply chain collapses. We believe that the Slync platform offers an innovative solution that brings the global logistics industry fully into the digital world. In our view, the value of this technology is significant.”