Fashion tech startup CaaStle is quickly unraveling. Once seen as a leader in clothing rental logistics, the company is now drowning in lawsuits, unpaid settlements, and serious fraud allegations. Its founder, Christine Hunsicker, has already stepped down. Now, things are getting worse.
Lawsuits Reveal Claims of Deception and Missing Millions
Two new lawsuits are at the heart of CaaStle’s crisis. One comes from P180, a company created to invest in ventures using CaaStle’s tech. The other is from apparel brand EXP Topco. Both claim the startup misled them and failed to follow through on key agreements.
P180 says CaaStle hid key financial details and pushed them to raise money under false pretenses. The lawsuit claims CaaStle promised strong assets—but delivered losses instead. P180 says it was forced to take out loans and invest millions, only to find the truth later. Now, it’s seeking to unwind all ties and recover more than $58 million in damages.
EXP Topco has a different issue. The company settled a copyright infringement dispute with CaaStle. But it claims CaaStle never paid the agreed fines. As a result, they’ve taken the case back to court.
CaaStle’s Collapse Could Be One of Tech’s Biggest Startup Failures
Rumors are now swirling about a class-action lawsuit. It may target an investment firm that helped retail investors back CaaStle, though the firm’s name hasn’t been revealed yet. Axios, which first broke the story, reports that CaaStle is considering bankruptcy. It has raised a small $2.7 million bridge round to explore next steps.
This is a steep fall for a startup that once raised over $530 million. Its last round was in 2019, totaling $43 million, according to PitchBook. Now, there’s a real chance that the entire funding has been burned. If so, this could rival the collapse of student loan startup Frank, whose founder was recently convicted of fraud.
CaaStle’s own board had already accused founder Christine Hunsicker of financial misconduct. Shortly after that, she resigned as CEO and left the board. In April, the board confirmed that CaaStle had run out of money and was forced to furlough employees.
Former employees say they aren’t shocked by the news. One said the company rarely shared financial updates. “We just laughed and said, ‘We probably don’t make any money,’” the person shared. While they didn’t witness fraud themselves, they weren’t surprised to hear the company was in trouble.
