Fashion tech company CaaStle is almost broke and is accusing its founder and former CEO Christine Hunsicker of financial misconduct, Axios has learned from multiple sources.

Why it matters: CaaStle had raised over $530 million in venture capital, and its investors appear to be wiped out, in what would be one of the biggest startup frauds ever.

• All of CaaStle's employees have been furloughed for two weeks, effective yesterday.

Catch up quick: Hunsicker launched the company as Gwynnie Bee in 2011, providing a subscription box service for plus-sized women's fashion.

• She would spend the next 14 years in constant fundraising mode, including from high-net-worth individuals like Bill Ackman and Henry Kravis, and built a board that at points included venture capitalist Ram Shriram and Alphabet chairman John Hennessy.
• The CaaStle rebrand in 2019 reflected an expansion to provide white-label subscription services to other clothing brands and retailers, including Ralph Lauren.

Behind the scenes: According to a letter sent on March 29 to investors from the company's board of directors, Hunsicker had been providing some investors with "misstated financial statements and falsified audit opinions, as well as capitalization information that understated the number of company shares outstanding."

• She had been fundraising as of last month, despite the board actively investigating her actions. She has now resigned as both CEO and a director, and the company says law enforcement is investigating, per the letter.
• It is unclear who remains on the board, except for longtime COO and interim CEO George Goldenberg, and why neither they nor top executives recognized the trouble earlier.
• A company spokesperson confirmed the furloughs and the authenticity of the shareholder letter.

Zoom in: Hunsicker also recently co-founded another company called P180, an inventory monetization company that has acquired a majority stake in retailer Vince and a minority stake in clothing brand Altuzarra.

• That company uses CaaStle technology, although is a separate legal entity with a different CEO.
• P180 was raising between $150 million to $200 million as of last month, according to an investor pitchdeck obtained by Axios.
• Axios messaged Hunsicker via LinkedIn, but didn't hear back. Also no comment from P180 or its CEO, via a spokesperson.

Look ahead: Tons of questions remain here, including how management or the board didn't realize there was a problem until recently. A fashion industry vet tells me that a basic warehouse visit should have raised immediate questions, since the inventory wouldn't have matched the reported revenue.

Hooters of America filed for bankruptcy protection and plans to sell over 100 company-owned restaurants to an investor group that includes Hooters' co-founders and franchisees.

Why it's the BFD: The announcement blames private equity, not an antiquated concept, for the chain's poor fortunes.

• "For many years now, the Hooters brand has been owned by private equity firms and other groups with no history or experience with the Hooters brand," says Hooters Inc. CEO Neil Kiefer, whose group operates around one-third of the independent franchised stores.
• And he brings sauce-stained receipts, claiming that his group's average restaurant revenue is more than double that of HOA-owned locations.

Catch up quick: Hooters of America backers at the time of bankruptcy include Nord Bay Capital and TriArtisan Capital Advisors, while prior PE owners have included H.I.G. Capital and KarpReilly.

The bottom line: "Hooters, proud of its Buffalo chicken wings but famous for the low-cut tops and bright orange hot pants worn by its waitresses, has more than 400 locations across 42 states and 29 countries." — Claire Moses, NY Times

🚑 AiRNA, a Cambridge, Mass.-based RNA editing startup, raised $155m in Series B funding co-led by Venrock and Forbion Growth. axios.link/4iPsqJc

• Sesame AI, an AI voice startup co-founded by Brendan Iribe (Oculus), is in talks to raise more than $200m at a $1b+ valuation co-led by Sequoia Capital and Spark Capital, per Bloomberg. axios.link/444dVg8

⚡ Focused Energy, a Redwood City, Calif., startup using lasers to spark fusion energy reactions, is raising $150m in Series A funding, per Axios Pro. axios.link/4l2Tkii

• MemryX, an Ann Arbor, Mich.-based developer of edge AI chips, raised $44m in Series B funding from HarbourVest, M Ventures, and eLab Ventures. axios.link/4laUf0j

• LightSource, an SF-based supply chain software startup, raised $33m co-led by Bain Capital Ventures and Lightspeed, with J2 Ventures participating. axios.link/3Y6Ma2z

• WeeFin, a French sustainability fintech, raised €25m in Series B funding. BlackFin Capital Partners led, joined by insiders IRIS, Asterion Ventures, and Ring Capital. axios.link/43zgnuY

• Chef Robotics, an SF-based maker of meal assembly robots, raised $20.6m in Series A funding. Avataar Ventures led, joined by Construct Capital, Bloomberg Beta, and Promus Ventures. It also raised $22.5 in equipment financing. chefrobotics.ai

🚑 Notable Systems, a Denver-based RCM startup for medical equipment providers, raised $12m in Series B funding co-led by Harbert Growth Partners and Grotech Ventures, per Axios Pro. axios.link/4lcBLwg

• Phlux Technology, a U.K. infrared sensor startup, raised £9m. BGF led, joined by insiders Octopus Ventures, Northern Gritstone, and Foresight also participated. phluxtechnology.com

• Ribbon, a Toronto-based voice AI recruitment platform, raised US$8m. Radical Ventures led, joined by Social Leverage, Cadenza Ventures, and GD1. ribbon.ai

• Fiberdom, a Finnish maker of plastic-free packaging, raised €3.5m led by Heino Group. axios.link/4j90jFj

• Qneiform, a Hungarian employee intelligence platform, raised €3m in seed funding co-led by Profounders Capital and Dayl Capital, alongside insiders Keen Ventures and DFF Ventures. axios.link/4ccDsG1

• OpenTug, a Seattle-based maritime logistics software provider, raised $2.2m led by TMV. opentug.com

• 65 Equity Partners and Inflexion acquired minority stakes in Kee Safety, a British safety products maker. keesafetygroup.com

🚑 Avasure, a Belmont, Mich.-based virtual care tools company backed by Heritage Group, acquired Nurse Disrupted, a Madison, Wis.-based provider of virtual nursing software. axios.link/428N6or

🚑 American Medical Staffing, a Timonium, Md.-based medical staffing firm, acquired Nexus Therapy, a Bellingham, Wash.-based provider of professional services to school districts. AMS backers include Great Point Partners and Stonehenge Partners. axios.link/4iKNuk4

• Brookfield agreed to buy a majority stake in Angel Oak, an Atlanta-based mortgage lender that manages over $18b. axios.link/42hDQ1z

• EQT agreed to acquire Eagle Railcar Services, an Eastland, Texas-based provider of railcar repair and maintenance services, from JM Texas Cos. eaglerailcar.com

• Providence Equity Partners acquired Tax Systems, a U.K. tax and accounting software provider, from Bowmark Capital. taxsystems.com

🚑 Veltris, backed by Trive Capital and BayLink Capital, acquired BPK Technologies, a Minnetonka, Minn.-based maker of custom health-care software. veltris.com

• Cerebras, a Sunnyvale, Calif.-based AI chipmaker that filed for an IPO last fall, said that CFIUS has signed off on its shareholder relationship with UAE-based G42. axios.link/3FRx76Y

• Siddhi Acquisition Corp., a SPAC chaired by Brian Finn (Siddhi Holdings), raised $200m in its IPO. axios.link/3FhQYvO

• Windrose, a Belgian electric truck maker, plans to file paperwork within the next month to raise at least $400m in a U.S. IPO, per the NY Times. axios.link/3DOBCP1

🚑 CVC Capital Partners is seeking to sell French diagnostics provider Sebia, which could be valued at €6b, per Bloomberg. axios.link/4iQdRFx

• Carrefour (Paris: CARR) acquired French convenience retailer Magne, which operates over 100 stores. axios.link/4iR7bqF

• CloudBolt acquired StormForge, an Arlington, Va.-based provider of Kubernetes resource optimization solutions. Both are Insight Partners portfolio companies. axios.link/43tYZaU

⚡ Chevron (NYSE: CVX) agreed to sell a 70% stake in its East Texas gas assets for $525m to TG Natural Resources, a unit of Tokyo Gas (Tokyo: 9531). axios.link/3FMJ1Pc

• DHL, the German logistics firm, acquired U.S. pharma logistics firm Cryopdp. axios.link/3XGIULf

• DuPont de Nemours (NYSE: DD) is seeking to sell two heat-resistant fiber brands, Nomex and Kevlar, per Bloomberg. A deal could be valued at around $2b. axios.link/4iULo1a

• Intel (Nasdaq: INTC) said it will seek to spin off non-core assets. axios.link/42kJfoC

⚡ LG Energy Solution of South Korea will pay $2b to acquire its Michigan EV battery joint venture with General Motors (NYSE: GM). axios.link/4l7ZSwh

• Mechanics Bank offered to acquire Seattle-based lender HomeStreet, (Nasdaq: HMST) via a $300m reverse merger. axios.link/4cgvmfJ

⚡ Sempra (NYSE: SRE) announced plans to sell some Mexico assets and a minority stake in its Sempra Infrastructure unit. axios.link/4c9gH5M

• Zurich Insurance Group invested in Icen Risk, a London-based M&A insurer. axios.link/3DZ5TL0

• BC Partners Credit raised over $1.4b for its third special opportunities fund. bcpartners.com

• CBPE, a London-based PE firm, raised £714m for its 11th fund. axios.link/42d0SX8

• Crestview Partners raised nearly $600m for a pair of single-asset continuations funds, for portfolio companies Venerable and ATC. VA Capital Company LLC ("Venerable") and ATC Drivetrain Investors L.P. Apollo led, and was joined by Hamilton Lane. crestview.com

⚡ Waterous Energy Fund raised around $1b for its third fund, with plans to buy small Canadian oil producers. axios.link/43sZkL0

• Jeff Terrell joined Arboretum Ventures as an investment partner. He previously spent 13 years with Hatteras Venture Partners. axios.link/3RtxWFm

• Eric Webster, former SVP of sales at Salesforce, joined Silversmith Capital Partners as an operating partner for go-to-market. axios.link/43ASjYK

Global M&A activity was 13% higher in Q1 2025 than in Q1 2024, but U.S. activity was more than 12% lower, according to new data from Dealogic.