CaaStle, a startup that launched in 2011 as a plus-sized clothing subscription service and later became an inventory monetization platform for clothing retailers, is facing financial difficulties, the company confirmed to TechCrunch following a report by Axios.

Citing a letter from the board, Axios reported that the company is almost out of money, CEO Christine Hunsicker resigned from her CEO role and the board, and the company has involved law enforcement to investigate alleged financial misconduct.

The company also confirmed to TechCrunch that it furloughed all of its employees.  

“The Board is deeply disappointed by the conduct that has led to this moment. Our immediate focus is on addressing the company’s challenges, supporting our employees, and preserving the value of our technology and business operations. We regret having to temporarily furlough our employees, but we believe this will best position the company to successfully recover from our current situation,” the company said in an emailed statement after TechCrunch inquired about the company’s status.

CaaStle raised over $530 million total, with its last round raised in 2019 at $43 million, Pitchbook estimates.

In that letter, also cited by Puck, the board is alleging that Hunsicker misled at least some of the company’s investors about financial performance, and about the company’s capital and outstanding shares, including two “falsified” audit opinions. 

Both Axios and Puck have reported that days before Hunsicker exited the company, she was out fundraising, and making claims about the company’s healthy finances.

Axios has noted that if the board’s allegations lead to a case of fraud made against the founder, this would be one of the largest such cases ever. 

Last week, Charlie Javice, the founder of student loan application startup Frank, which was purchased by JPMorgan for $175 million, was found guilty of defrauding the bank. The bank claimed Javice inflated the customer count. But the investment numbers for CaaStle are three times as large.

While this might not be a typical startup shutdown experience, experts have told TechCrunch that 2025 is on track to be another brutal year for failed startups.