Startups Category
Who Is Governing AI Companies? For Nearly Half Of AI Startups In California, The Answer Is Only Men
By the California Partners Project, Crunchbase and illumyn Impact This report was produced through a collaboration between the California Partners Project, illumyn Impact and Crunchbase. Executive summary If social media has taught us anything, it’s that new technologies can have widespread and often unanticipated effects. They can change not only how we work but also how we think and how we relate to each other. Artificial intelligence has an unprecedented potential to shape our future in exciting and unforeseeable ways. As business leaders and government agencies around the world grapple with the responsibility of managing the risks that accompany the promised rewards of AI, one immediate and evidence-based place to start is building a diverse board of directors. Yet our research indicates that, on that front, AI company boards fall woefully short. Boards that fail to reflect a wide range of experiences and viewpoints are not well-positioned to oversee companies whose products may determine how bank loan applications are evaluated, how healthcare issues are diagnosed, or how educational resources are allocated. Although no single measure can ensure responsible AI development, diverse board leadership is vital for companies creating technologies that will fundamentally reshape how we live, work and interact. Within this study, we look at gender diversity, which is reasonably measurable, as a proxy for diversity of perspectives, life experience, areas of expertise and other demographics. To understand the gender mix on AI boards, we analyzed the board composition of more than 140 AI companies headquartered in California, where venture-backed AI development is concentrated. Our study focused on 102 private companies that have raised at least $50 million in cumulative funding. As we’ve seen time and again, transformative innovations are as likely to come from today’s nascent startups as they are from established industry leaders. Governance of these companies during their high-growth, pre-IPO period is arguably as important as it is after they go public. We also looked at the boards of 39 publicly traded AI companies for comparative purposes. Our analysis revealed a striking lack of gender diversity among the people who govern some of the world’s most influential AI startups. Women comprise only 15% of the boards of private AI companies. More than 40% of these private boards don’t have any women directors. Two root causes contribute to this gender disparity — one structural and one behavioral. First, investors and founders collectively hold the majority of private company board seats, and women are still underrepresented in those categories. Second, when appointing independent directors, boards often limit their consideration to familiar candidates instead of seeking qualified experts outside their immediate networks. The good news: There are plenty of executive women and people of color on the cutting edge of AI innovation who are ready to bring their voices and operating expertise to the boardroom. Companies that prioritize building a diverse board need only to look beyond their existing networks to find a wealth of AI board talent. Consider this precedent: Five years ago, one-third of all public companies in California had no women board members. With focus and effort, all-male boards are now the rare exception. Given the rapid pace of AI development, companies need to act now, while the technology and its applications are still emerging. CEOs and board members who bring more women and people of color into their boardrooms will help create a productive and healthy AI-powered future for all of us. Key findings Among the AI companies headquartered in California included in our study: Women average just one seat in AI boardrooms Across all of the California-based AI private companies studied, women hold an average of one seat on a six-person board. Among 102 private companies, only five boards (5%) have an equal or greater number of women than men in the boardroom. More than 40% of private AI companies have all-male boards Among the over 100 privately held AI companies headquartered in California included in our study, 44 (43%) don’t have any women in the boardroom. Gender diversity is slightly higher on the boards of companies with more capital. Among those with cumulative funding of at least $50 million but less than $100 million, 62% have all-male boards. For companies with at least $100 million in funding, that number drops to 32%. This shift likely stems from the addition of independent directors who bring operational and market expertise. Among publicly traded companies, women hold an average of two board seats, double the average among private company boards. Research suggests that, to capture the full economic benefits of diversity, boards should include at least three women directors. Just half of the public companies we studied meet that threshold. For private company boards, independent director appointments offer the fastest route to diversity Most private company board seats (72%) are held by company executives (the CEO and co-founders, typically) and early investors. Women hold only 10% of these board seats, a reflection of the underrepresentation of women among venture capital investors and the entrepreneurs they fund. Women hold less than 20% of investing partner roles in venture capital firms. Companies with women-only founders secured just 3% of AI venture funding in 2023, a number stagnant since 2015. More than half (55%) of the women directors included in our study hold independent board seats. That is, they are neither tied to the company’s founding or management team nor investors in the company. Whereas public companies must have a minimum number of independent directors, private companies have no such requirements. Therefore, independent directors are typically added later in a company’s lifecycle, often as part of preparation for an IPO. The percentage of companies without any independent directors decreases as the level of funding increases — from 36% for those with $50 million to $99 million to 21% for those with $100 million or more. Our findings suggest that women are more likely to be appointed to private company AI boards as the second independent director. On boards with only one independent director, women hold 17% of those independent director seats. Among companies with more than one independent director, 67% had at least one woman in that role. Summary Women are underrepresented on the boards of AI companies — especially high-growth, earlier-stage startups. While board diversity is not a panacea, it is one essential element for the companies developing technology with the potential to influence society in profound ways. To increase the number of women board members, companies should: Companies don’t need to trade off technical expertise and governance experience to bring diverse voices into their AI boardrooms. They simply need to look beyond their immediate networks. Methodology This study follows the methodology utilized in the annual Him For Her and Crunchbase studies of diversity on private company boards. Leveraging the Crunchbase database, we identified 409 companies in the AI industry with headquarters in California. Among them were 40 publicly traded companies and 369 privately held companies with at least $50 million in cumulative funding as of July 1, 2024. To ensure that each company’s board profile was current, we included only companies that publish their board of directors on their website. We then referenced company website data, Crunchbase profiles and other publicly available information to characterize the board members. The study included only board directors; board observers and/or advisers were excluded from the data set. For private company boards, we segmented board members according to type of board seat: executive, investor or independent. In the few cases in which founders and past executives remained on the board despite no longer having an operating role at the company, we classified them as “executive directors” in recognition of their original relationship to the company. We identified gender by referencing professional profiles on Crunchbase and, when not available, other sites. About the authors Co-founded by California First Partner Jennifer Siebel Newsom and Olivia Morgan in partnership with the people of California, the California Partners Project is dedicated to championing gender equity across the state and ensuring our state’s media and technology industries are a force for good in the lives of all children. The California Partners Project tracks and spotlights women’s representation on corporate boards and offers an Inclusive Boards Playbook Series developed in partnership with Stanford’s VMware Women’s Leadership Innovation Lab with strategies for board refreshment and culture-building. For more information about the nonprofit organization, visit www.calpartnersproject.org. Connect with the California Partners Project on LinkedIn and Instagram. Crunchbase is a predictive intelligence solution that forecasts private-market movements using the unique combination of live private company data, AI and market activity from more than 80 million users. It helps investors, dealmakers and analysts be the first to find and act on opportunities. To learn more, visit crunchbase.ai and follow Crunchbase on LinkedIn and X. illumyn Impact (formerly Him For Her) is a social impact organization with a mission to diversify the board ecosystem, which is building and shaping the future: from healthcare, to AI, to climate change and beyond. Drawing from its ever-growing referral-based talent network of 8,000+ under-networked executives, a third of whom are women of color, illumyn Impact makes highly curated introductions that bring fresh expertise into the boardroom. illumyn Impact is proud to partner with 100+ leading private equity and venture capital firms. A 501c3 corporation, illumyn Impact operates through the generosity of its founding partners GV, IVP, L Catterton, Mayfield Fund, Silver Lake Partners, SoftBank, Starboard Value and Tiger Global Impact Ventures, and supporters like Brad Feld and Amy Batchelor, Reid Hoffman, Jeff Weiner, Nasdaq and many others. Its sister organization, illumyn, supports underrepresented executives in some of the world’s largest companies through its corporate boardroom excellence fellowship program. Illustration: Dom Guzman
Y Combinator Amps Up Investing In Fintech Startups In 2025, Data Shows
Venture funding to fintech companies has grown this year and concentrated into fewer companies, Crunchbase data shows. Leading the way in backing those startups is a mix of private equity and alternative investors, with venture capital firms next in line. Global venture funding to financial technology startups has already reached $31.6 billion across 2,558 deals in 2025 as of Sept. 11, per Crunchbase data. That’s a 17.5% increase in dollars raised compared to the $26.9 billion raised across 3,508 deals during the same time period in 2024. When it comes to leading or co-leading rounds of $100 million or more, private equity firms including MGX, T. Rowe Price, SurgoCap Partners and Franklin Templeton are the top investors in fintech companies so far this year, Crunchbase data shows. In March, cryptocurrency exchange Binance received a massive $2 billion investment from Abu Dhabi-based investment firm MGX. In April, Plaid, which connects user bank accounts to fintech apps, raised a $575 million round led by Franklin Templeton at a $6.1 billion valuation. And in July, iCapital, a fintech platform for alternative investments and investors, announced that it had raised more than $820 million in a funding round co-led by SurgoCap Partners and accounts advised by T. Rowe Price Associates and T. Rowe Price Investment Management. The financing took iCapital’s valuation to over $7.5 billion. Venture capital firms that led or co-led rounds larger than $100 million include Sequoia Capital, Founders Fund, Paradigm and Ribbit Capital. One fintech company in particular was a recipient of funding from both private equity and venture capitalists: expense management startup Ramp. In July, the buzzy startup announced it had raised a $500 million Series E-2 at a $22.5 billion valuation led by Iconiq Capital. That round came weeks after Ramp announced it had raised $200 million in a Series E round led by Founders Fund, at a valuation of $16 billion. YC picks up the pace This year accelerator Y Combinator has overall invested in 100 fintech companies through Sept. 11 — far more than any other investor. Other active investors in the space include the usual suspects, per Crunchbase data: Antler, FJ Labs, General Catalyst, Andreessen Horowitz, Coinbase Ventures, Accel and QED Investors. Y Combinator isn’t just backing small deals, either. When it comes to rounds greater than $5 million, YC was still the most-active investor this year, participating in 43 fintech funding deals. That’s up 65.4% compared to the 26 deals that YC participated in during all of 2024, signaling a renewed interest on the accelerator’s part in the space. Andreessen Horowitz, which has been a busy startup investor overall in recent years, was next, writing checks across 20 rounds, already more than the 19 fintech deals it participated in during all of 2024. General Catalyst is not too far behind, participating in 17 deals. Sequoia, Accel, QED Investors and FJ Labs each took part in 15 deals for fintech startups. Meanwhile, QED Investors also led or co-led the most post-seed rounds for fintech-related startups. Related Crunchbase query: Related reading: Illustration: Dom Guzman
How Smaller Funds Can Access Top Deals In A Competitive Market
By Andrew Gershfeld For a long time, smaller venture funds leaned on the same advantages: speed, flexibility and deep sector expertise. Conventional wisdom held that while big firms moved slowly, smaller ones could act swiftly, write early checks and provide highly targeted support in a narrow space. That story no longer holds up. Big funds have learned to play smallAndrew Gershfeld The largest firms now look less like monolithic institutions and more like multidisciplinary studios. They hire domain-specific advisers, create sector-focused practice groups, and develop detailed post-investment playbooks, offering the same “tailored” value propositions that once distinguished niche funds, and with more resources. The numbers underline the tilt. In 2024, 30 funds captured close to 75% of all venture dollars. Researchers also found that 74% of persistent VC success comes from better deal flow after early wins. Once a firm builds credibility, it gets preferential access to the most promising startups, and the cycle reinforces itself. Why early access matters more than expertise Money looks the same to every founder. Expertise can be purchased — whether through consultants, advisory boards or strategic hires. What cannot be replicated is the trust built before a round becomes competitive. That is where smaller funds still have an opening. The real advantage is not expertise but access — specifically, early access. By the time a startup is widely circulating its deck, the outcome already favors whoever has been in the room with the founder from the get-go. One clear example is Initialized Capital’s early bet on Coinbase. In 2012, out of a $7 million debut fund, the firm wrote a $300,000 check into the crypto exchange’s seed round, when most investors dismissed the sector as fringe. By the time of its IPO in 2021, that stake was worth $2.4 billion. What set Initialized apart was being in the room early before the deal became obvious. What successful small funds are doing differently Some smaller funds are already adapting. They no longer think of themselves as check-writers waiting for polished pieces. Instead, they operate as active participants in a founder’s journey well before the company raises institutional capital. That shift shows up in specific behaviors. Smaller funds are mapping relationships with accelerators, angels and operators months ahead of a raise. They spend time in communities where founders are still testing ideas. They make introductions — to customers, hires and partners — at a moment when those introductions can change a company’s trajectory. They also mobilize their portfolios. Founders are often the best scouts, and funds that cultivate reciprocal relationships expand their reach in a way no spreadsheet of leads can. Even in competitive areas like AI or biotech, smaller funds can differentiate by serving as a bridge to strategic players. A warm introduction to Nvidia, Microsoft or a top-tier research lab validates a startup long before an institutional round is announced. These are the kinds of moves that earn trust before the larger firms even notice the opportunity. The mindset shift What it comes down to is mindset. Smaller funds can no longer think of themselves as investors selling capital. They need to act as nodes in a network: connecting earlier, engaging more personally, and maintaining persistence long after a term sheet is signed. In today’s market, competition for quality deals has never been fiercer. The firms that succeed won’t be the ones who claim they are faster or more specialized. They will be the ones who build trust before capital is even on the table. Smaller funds can still win, but only by rewriting the playbook altogether. Andrew Gershfeld is a general partner at Flint Capital, a VC firm investing in early-stage startups in AI, cybersecurity and digital health, and helping them expand into the U.S. market.
AI Is Gorging On Venture Capital. This Is Why ‘Physical AI’ Is Next
By Alberto Onetti From venture capital to AI capital? Silicon Valley continues to set the pace for global innovation. In 2025, scaleup investments reached $111 billion. Of that, a staggering $103.5 billion — 93% of the total — went into AI. In a nutshell, “VC investments” in Silicon Valley now essentially mean “AI investments.” For every dollar invested in technology, 93 cents flow into AI. The artificial intelligence sector is literally gorging on venture capital. These are just some of the findings of our latest report, “Physical AI. Shaping the Market of the New Possible,” created by Mind the Bridge alongside Crunchbase and unveiled at our latest Scaleup Summit in San Francisco earlier this month. Whether this proves to be a bubble or a long-term global trend is still unclear. As Crunchbase News Senior Data Editor Gené Teare pointed out at the opening of the summit: “We are two to three years into a new investment cycle. Despite the billions raised by foundation model companies, we are still in the early stages of funding to AI, which will shape the next two decades.” What is clear is that Silicon Valley is betting everything on AI. And when the world’s biggest “casino” goes all in, it’s hard to imagine the game ending any other way. Physical AI: The next leap in the AI revolution But within AI, there are multiple waves. The first major wave was generative AI. After the billion-dollar rounds of OpenAI, Anthropic and Inflection AI in 2023, capital concentrated around just a handful of foundational model players. By 2025, OpenAI ($40 billion) and Anthropic ($13 billion) alone absorbed the lion’s share of the $80 billion invested in the sector. The lower figures of 2024 did not mark a slowdown, but rather a physiological pause after these gargantuan rounds, with players focused on scaling operations and deploying the capital already raised while waiting for the next big wave. And that new wave already has a name: physical AI. Robots that can think, rather than simply execute preprogrammed commands, are becoming reality. The ambition is clear: to move AI beyond the screen and into the physical world. In just nine months of 2025, scaleups in this field have already raised more than $16 billion. Leading the way are Meta’s large-scale investment in Scale AI — a platform focused on training data for real-world applications in autonomous mobility, AR/VR and robotics — as well as Figure AI’s new $1 billion round for humanoid robotics, and Neuralink’s $650 million raise for brain-computer interfaces. This new physical AI wave — born from the convergence of generative AI, autonomous agents and the real world — opens up an almost limitless range of industrial applications. With tens of billions of dollars already flowing into the sector, physical AI carries the promise of revolutionizing manufacturing and beyond. If the trend holds, as I believe it will, Silicon Valley may be at the center of a new transformative cycle: from thinking machines (generative AI) to acting machines (physical AI). AI’s heavy hitters Generative AI scaleups account for 15% of companies but 45% of the capital invested historically in AI scaleups. Meanwhile, the emerging physical AI vertical seems to be following a similar trajectory: 254 scaleups (9% of the total) have already absorbed 18% of all AI funding. These dynamics highlight two key points: Silicon Valley: A century of reinvention Once again, Silicon Valley confirms itself as the undisputed epicenter of global innovation. Over the past century — starting with early defense-related investments in the 1930s and 1940s — it has been the cradle of groundbreaking technological transformations that reshaped the global economy: from integrated circuits and personal computers to the internet, mobile, cloud computing, social media and nowadays AI. Brace yourself for disruption. For more insights on Silicon Valley and physical AI, see Mind the Bridge’s reports, available for free download here. Alberto Onetti Alberto Onetti is chairman of Mind the Bridge and a professor at University of Insubria. He is a serial entrepreneur who has started three startups in his career, the last of which is Funambol, among the five Italian scaleups that have raised the largest amount of capital. He is recognized among the leading international experts in open innovation and has wide experience in setting up and managing open innovation projects — venture clients, venture builders, intrapreneurship, CVCs — with large multinational companies, as well as advising and training on this subject. Onetti has a column on Sifted (Financial Times) and several other tech blogs. Related Crunchbase query: Related reading: Illustration: Dom Guzman
Legal Tech Investment Hits All-Time High With Filevine Funding
Funding to legal tech startups has hit a record high in 2025, driven by investor enthusiasm for AI’s potential to bring more automation to the legal profession. Per Crunchbase data, companies in the legal and legal technology sectors have raised just over $2.4 billion so far in 2025 in seed through growth-stage funding. With over three months left in the year, it’s already the highest annual total on record. Filevine snags $400M A giant funding announcement this week played a big role in pushing the totals higher. Filevine, a provider of legal practice management software, announced Tuesday that it closed on two previously undisclosed rounds totaling $400 million 1. Insight Partners led the first round and joined Accel and Halo Experience Co. to co-lead the second. Founded in 2014, Salt Lake City-based Filevine has expanded its platform over the years to cover more tasks for legal practices. Use cases touted on its website include time tracking, billing, case management software and secure document management, among others. Filevine plans to use the funds in part to continue expanding its AI capabilities. The company said it counts nearly 6,000 customers and 100,000 users. Other big fundraisers, and plenty of seed deals too Several other startups have also closed on sizable funding this year, including: Notably, however, the boom in legal tech venture funding isn’t only about big rounds for prominent unicorns. The intersection of AI and legal work is one of the more active areas for seed funding, a trend we first observed last year and that has continued into 2025 as well. Nothing mysterious here For those seeking an explanation for why legal tech funding is on the rise, there is an obvious one that comes to the fore. In essence: Much legal work is boring and repetitive, which makes it well-suited to offload more tasks to AI. In fact, among all professions impacted by artificial intelligence, legal work is expected to be one of the most affected by automation. In one oft-cited Goldman Sachs report, analysts estimated that an astounding 44% of legal work could eventually be automated. AI-enabled software will be taking on much of this workload. On another side note, in addition to being repetitive, legal work also tends to be expensive, as anyone who has hired a lawyer can probably attest. While it remains to be seen whether AI will reduce the cost of legal services, it should at least free up time for lawyers and support staff to put their billable hours to the most productive use. Related Crunchbase query: Related reading: Illustration: Dom Guzman
The rise of retail investors in secondaries, and why delayed IPOs will become the norm
Retail investors are increasingly shaping the secondary market. In Q4 2024, platforms like EquityZenreportedthat 86% of total transaction volume came from retail participants—an eye-catching shift as tools like Forge and EquityZen promise broader access to private shares. But does more access mean more opportunity, or more risk? Today onEquity, Rebecca Bellan is joined byJared Carmelof Manhattan Venture Partners to dig into what he calls a “once-in-a-generation opportunity” in secondaries, why he’s not crazy about the increase of retail investors, and how secondaries provide a “pressure relief valve” that could keep startups private well past their startup years. Listen to the full episode to hear more about: How MVP has worked to “institutionalize” secondaries out of the Wild West of investing.Why “informational asymmetry” makes some secondary offerings a raw deal for retail investors.How a sluggish IPO market is catalyzing a robust secondaries market that creates a liquidity flywheel for VC.And Jared’s prediction that in a few years, the secondaries feedback loop will delay IPOs up to 20 years. How MVP has worked to “institutionalize” secondaries out of the Wild West of investing. Why “informational asymmetry” makes some secondary offerings a raw deal for retail investors. How a sluggish IPO market is catalyzing a robust secondaries market that creates a liquidity flywheel for VC. And Jared’s prediction that in a few years, the secondaries feedback loop will delay IPOs up to 20 years. Equity is TechCrunch’s flagship podcast, produced by Theresa Loconsolo, and posts every Wednesday and Friday. Subscribe to us onApple Podcasts,Overcast,Spotifyand all the casts. You also can follow Equity onXandThreads, at @EquityPod. For the full episode transcript, for those who prefer reading over listening, check out our full archive of episodeshere.
Cast your vote: Help shape the TechCrunch All Stage agenda
TechCrunch All Stageis just around the corner — and you get to help shape the agenda. From a competitive pool of applicants, two of the six visionary finalists are one step away from leading a roundtable session on July 15 at SoWa Power Station in Boston. Your vote determines who makes it. Audience Choice voting closes May 2 at 11:59 p.m. PT.Choose wisely — you only get one shot. While you’re at it,grab your ticket now to save up to $210and lock in your spot for the winning sessions — some of the most tactical, founder-focused conversations of the day. Don’t miss your chance to connect, learn, and scale smarter. Finalist sessions Building team intelligence: How product-led innovation transforms collaborative problem-solvingJeff Chow, Chief Product and Technology Officer, Miro AI can automate, but it can’t replace the magic of a well-connected team.Jeff Chow, Miro’s CPTO, shares how to design products that don’t just streamline tasks but also supercharge collaboration. From boardroom strategies to product blueprints, he’ll show how inclusive, human-first design turns communication chaos into high-performance teamwork. What venture investors are looking for in AI investment targets in enterprise startups in 2025Darrell Etherington, Head of Network and Sourcing, OMERS Ventures AI hype is everywhere — but enterprise buyers want more than just buzzwords.Darrell Etheringtonof OMERS Ventures offers a rare insider’s take on what actually gets enterprise-focused AI startups funded in 2025. Discover what today’s investors demand, and how your pitch can rise above the noise. How I created a $40 million business from my kitchenMike Kurtz, Founder, Mike’s Hot Honey From pizza slice to pantry staple,Mike Kurtztook a homemade recipe and turned it into a $40 million cult brand. In this spicy session, he’ll break down how he sparked a movement with zero marketing budget, proving that great taste and word-of-mouth hustle can go a long way. From fundraising to IPO: How to build a PR & marketing engine that drives growthNikki Parker, EVP, Marketing and Communications, Insight Partners Great products don’t sell themselves — especially when you’re chasing growth and an IPO.Nikki Parkerfrom Insight Partners reveals how to architect a high-impact PR and marketing machine that commands attention, earns trust, and drives exponential value. If you’re ready to scale, this session is your playbook. Thriving with anxiety: How startup founders can turn fear, pressure, and self-doubt into their greatest advantageDr. David H. Rosmarin, Associate Professor, Harvard Medical School Startups are pressure cookers — and anxiety comes with the territory. But what if it could be your edge?Dr. David Rosmarin, a leading Harvard psychiatrist, shares how founders can reframe fear and stress into clarity, confidence, and decisive action. Come for the science, stay for the mindset shift. Mistakes startups make and hacks when raising money from VCsHyuk-Jeen Suh, General Partner, SkyRiver Ventures Pitching VCs? There’s a fine line between a compelling story and a costly misstep.Hyuk-Jeen Suhof SkyRiver Ventures pulls back the curtain on the mistakes that stall fundraising — and the smart, scrappy hacks that actually work. If you want to land your next round, don’t miss this one.
Troubled startup CaaStle is now facing two new lawsuits and more allegations
CaaStle, the embattled fashion startup whose board of directors accused its founder, Christine Hunsicker, of financial misconduct, is starting to face lawsuits from a partner and a supplier over missed payments and more allegations of fraud. Asfirst reported by Axiosand by suits seen by TechCrunch, CaaStle is being sued by P180, a vehicle it launched to invest in companies that used CaaStle technology, and by EXP Topco, an apparel company that says CaaStle never paid it after reaching a settlement for copyright infringement. A representative for CaaStle did not immediately respond to TechCrunch’s request for comment. TheP180 suitalleges, “Nothing about CaaStle was true.” The lawsuit claims that CaaStle tried to hide details of its income and financial stability from P180. “It then fraudulently induced P180, among other things, to raise capital and take out multiple loans in the expectation that P180 would acquire viable assets, which P180 ultimately did,” the suit alleges, adding that CaaStle also tried to force the two to merge. The suit goes on to say that because P180 believed it was misled, its “investors took full control of the board,” the suit continues. “P180 has been harmed in excess of $58 million and seeks recovery of those proceeds, rescission of contract, and unwinding of corporate ties between itself and CaaStle.” Meanwhile, EXP Topco is also suing. Italleges that CaaStle breacheda settlement agreement by not paying fines after reaching the settlement over alleged copyright infringement. And Axios is alsoreporting on rumors of a possible class-action lawsuitagainst an investment firm that brought CaaStle retail investors, although it didn’t report the name of the investor. Axios first reported the news of CaaStle’s financial troubles a month ago. Hunsicker, the company’s founder, resigned from the board and stepped down from her role as CEO when the company said it was investigating allegations of financial misconduct. The company is exploring bankruptcy and secured $2.7 million in financing to help that process, Axios further reported. CaaStle raised over $530 million total, with its last round raised in 2019 at $43 million, PitchBook estimates. In April, the board confirmed to TechCrunch that its financial circumstances were so dire at that time that it had to furlough employees. Should that whole $530 million be gone, this would be one of the largest startup fraud cases in recent history. In comparison, Frank, the student loan application startup, was purchased by JPMorgan for $175 million. Frank’s founder, Charlie Javice,was found guilty of fraud last month. TechCrunch spoke to two former employees who said they were not surprised to hear that the company had financial troubles, though they didn’t witness any of the alleged fraud. One former employee, who asked to remain anonymous, doesn’t recall the company holding updates about its financial health or how well it was doing. “I think everyone laughed it off and was like, ‘Oh, we probably don’t make any money,” the employee told TechCrunch. When asked for a reaction to the fraud allegations, this person said, “I don’t think anyone expected it.”