Silo cut about 30% of staff after a loan default froze its lending, and reopened M&A talks

Bay Area software that automates workflows for food and agricultural businesses, with payments, inventory, accounting and financing add-ons

A leaner Silo can keep serving perishables customers with supply chain software while exploring an acquisition as an alternative way out

$32M Series C in summer 2023 from investors including Initialized, Haystack, Tribe Capital, KDT and a16z

Silo, a Bay Area food supply chain startup founded in 2018, began by automating workflows of food and agricultural businesses, then expanded into payment products, inventory management, ledger accounting and financing. It had held M&A discussions before its Series C, but the raise let it pause them.

In the weeks before the layoffs a customer became delinquent on a loan, so Silo's banking partner paused the loan product. Silo worked with the bank to resolve it so the facility could fund again, but the unpaid loan and lending pause hurt the business. On a Tuesday in May 2024 it laid off roughly 30% of staff, north of two dozen people, across all departments, providing severance and recruiting support. TechCrunch also heard that M&A discussions had picked back up on the back of last year's growth and the possible need for an exit.

A customer default caused the bank partner to pause Silo's loan product, cutting revenue

The company was still recovering from the pause even after the facility could fund again

Cutting across all departments reduced costs without eliminating any single team

M&A talks offered an alternative outcome, since the Series C had only postponed earlier discussions

Embedding credit in a software product ties revenue to a bank partner's risk appetite, so a single default can force a company to shrink and consider selling.

As of 2024-05-22, Silo had cut about 30% of staff, restored its lending facility but planned to ramp lending carefully, and was reported to be in M&A talks.