Despite Slync.io CEO Chris Kirchner’s claims that the FreightTech company “has solved its liquidity issues,” former and current employees say they want him to make good on his promises and pay them for the two months of wages they are owed.
One former employee who is familiar with the ongoing late payment situation at Slync says it’s unclear how many employees remain at the company, estimating that two-thirds of the company’s current employees are interviewing or actively searching for new jobs.
“At this point, anything he [Kirchner] says is b——-,” said the source, who spoke to FreightWaves on the condition of anonymity. “He asked for our patience in May and we gave it to him, but it’s now July and we still haven’t seen paychecks.”
Another former employee, who also spoke on the condition of anonymity, said Slync shouldn’t expect workers to continue to work for free when Kirchner is “flying around the world in his private jet trying to buy soccer teams and spending millions of dollars of company funds to sponsor various sports teams.”
Over the holiday weekend, Kirchner, on behalf of Slync, participated in the JP McManus Pro-Am golf tournament in Limerick, Ireland. Out of 50 teams, Slync finished 49th.
“It’s so frustrating that the same energy and money he [Kirchner] puts toward his sports endeavors isn’t going toward paying his employees or finding a way to pay them,” a source familiar with the situation told FreightWaves. “He has no loyalty to his employees, who worked hard to develop solutions for customers, so why should he expect his employees to continue working for free?”
After initially labeling as false news reports that Slync had failed to pay its employees, Kirchner then blamed it on an internal administrative error before telling FreightWaves that the company’s payroll issues came about because of its “inability to timely liquidate funds.”
“The company’s recent payroll issues resulted from the company’s inability to timely liquidate funds from an otherwise attractive investment vehicle in order to make recent payroll and not from any funding shortfall,” said Jaime Reints, vice president of marketing at Slync.io, in a statement to FreightWaves. “As a result of the company’s failure to make payroll, our payroll processor terminated its relationship with the company, further complicating our efforts to restore payroll.”
Despite Kirchner’s repeated statements that he and Slync remain “financially viable,” he recently listed his 2010 Gulfstream G550 for $23 million.
Slync employees feel duped
When the company started experiencing payroll issues in April and May, Kirchner and Slync were quick to address the ongoing payroll delays.
At the time, employees were told in an email from Kirchner that Slync was “transferring 75 days worth of payroll and associated expenses into our primary bank accounts from our company investment accounts.”
“We have plenty of runway to survive and thrive using previous funding rounds; however, we continue to work diligently toward our Series C which will come in the next few weeks,” Kirchner wrote in an email, which FreightWaves obtained a copy of.
Kirchner added that he anticipated receiving the Series C funding in March, but the delay had been caused by “the market downturn and my desire to protect ourselves from giving away too much of the company.”
“As the markets have changed negatively most of the VC funds have completely paused on writing investment checks, leading many companies to lay off employees, which we have avoided, I have been fighting to get us the best deal possible given these conditions and what is at stake for us, and unfortunately, it has taken more time than expected,” Kirchner wrote in the email to employees.
Barring “any unforeseen hiccups,” Kirchner said he expected Slync to be fully funded by the end of June.
That didn’t happen.
Startup valued at $240M
Over the past two years, Slync, valued at $240 million, has raised over $70 million, including a $60 million Series B funding round that closed in February 2021 and was led by venture firm Goldman Sachs Growth, ACME Ventures, 235 Capital Partners, Correlation Ventures and other existing investors.
Slync, a logistics visibility platform that works with shippers, 3PLs and carriers, was co-founded in 2017 by Kirchner, who serves as chairman and CEO, 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 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.
Besides receiving $70 million in funding since the start of the COVID-19 pandemic in March 2020, Slync.io also obtained more than $390,000 in funds through the U.S. Small Business Administration’s Paycheck Protection Program (PPP).
According to Slync’s PPP loan application, which was approved by Silicon Valley Bank, the funds were used to save 20 jobs.
Forgivable loans through the PPP, administered by the Small Business Administration, started out with $350 billion in the CARES Act signed by former President Donald Trump in late March 2020 and were reupped in April 2020 with an additional $320 billion. The third round of funding, $284 billion in forgivable PPP loans through the SBA, opened up to lenders in January 2021.
In an interview with FreightWaves after the $60 million Series B raise, Kirchner said the company planned to ramp up hiring and 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 did add nearly 30 employees — from 70 in 2021 to nearly 100 total as of May, but the number of employees continues to dwindle.
Slync.io behind in sports sponsorship payment
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 fulfill its arranged payments and is several months behind on its sponsorship deal, owing the Stars around $800,000, The Athletic first reported.
Slync.io’s Jaime Reints declined to comment on claims the logistics company hasn’t paid the NHL team in months.
“All of our contracts are confidential and we can’t comment on public speculation,” she said.
As of publication, the Dallas Stars’ media team had not responded to FreightWaves’ request for comment on whether Slync.io was current on its sponsorship payments to the team.
In January, Norwegian golfer Viktor Hovland won the 2022 Slync.io Dubai Desert Classic, 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 English soccer team bid
Further fueling concerns about the tech startup’s financial health was Kirchner’s mid-June withdrawal of his bid to personally buy Derby County, an English soccer team, two months after he was named the preferred bidder, according to Reuters. The news outlet reported that Kirchner failed to meet 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.
“Any personal assets of Mr. Kirchner isn’t of relevance to Slync,” she said.
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