Former employees of ag insights platform Gro Intelligence have filed a putative class action lawsuit* against the New York-based firm for alleged violations of the Worker Adjustment and Retraining Notification (WARN) Act, which requires employers with 100+ full-time employees to provide written notice of mass layoffs at least 60 days in advance. According to the lawsuit, “Starting on February 1, 2024 and continuing through March 1 2024, Defendant abruptly terminated over 90 of its employees, about two thirds of its staff, over that 30-day period.”. At the time, staff at the firm—who were informed in February that Gro couldn’t meet payroll—told AgFunderNews that the company had said it would cover back pay and PTO, plus health insurance through March for those laid off. They were not offered a severance package or given any advance warning that they would be terminated.Gro had been trying to raise additional capital through a convertible bond [a bond that can be converted into shares at a later date] as a bridge until it generated more consistent and stable revenues, claimed one source, who said the firm had secured an undisclosed amount of 11th-hour funding that came “with a lot of conditions.”Former CTO James Cariello, who was installed as CEO at Gro Intelligence in February to replace founder Sara Menker, did not respond to a request for comment on the lawsuit

Ag insights platform Gro Intelligence laid off 60% of its staff on Friday but is understood to have secured some 11th hour funding.Employees at the New York and Nairobi-based startup—who were told last week that Gro couldn’t meet payroll—were told that the company would cover back pay and PTO, plus health insurance through March for those who were to be laid off. They were not offered a severance package.According to one industry source, Gro received “some money with a lot of conditions.”Former CTO James Cariello, who was installed as CEO last month to replace founder Sara Menker, did not immediately respond to a request for comment.‘A fundamental mismatch between the product and the market’Founded by former ag commodities trader Sara Menker in 2012, Gro Intelligence claims it is building the world’s largest agricultural data platform.The firm, which generates the bulk of its revenues from Unilever, had picked up some business with other packaged food companies and a number of quantitative and fundamental commodities investors, another industry source told AgFunderNews.“It had positioned itself as a food security platform to a small Asian country and a country in the Middle East exporting oil, without success. It had also attempted to engage the US government under a variety of guises but was only picking up bits and pieces of business here and there.”While Gro had lost a crop input company as a client, its current woes were not the result of a sudden loss of clients, said the source. “The renewal rates for the commodities investors were excellent.”Asked what had gone wrong, the source blamed a combination of the challenging funding environment and a “fundamental mismatch between the product and the market.“They were chasing deals for projects that resembled bespoke consultancy work as opposed to something that would generate replicable revenue streams. They also had a number of mis-hires and until very recently, they didn’t have a CFO, so I don’t know that they were able to produce reasonable financials on a quarterly basis for investors.“Sara should have brought in an operating CEO probably two years ago.”‘Like most startups, it tries to be everything to everyone and needs to find its niche’Gro Intelligence is an AI-powered insights company providing decision-making tools and analytics to a range of clients from food & ag companies to governments, insurers, investment banks, consulting firms and universities. It netted an $85 million series B round in January 2021 from backers including Intel Capital and Africa Internet Ventures, and was named as one of TIME’s 100 most influential companies that year.According to one industry source who spoke to us earlier this month, Gro “has a great product and a good group of intelligent people behind it, but I’m not sure they know how to sell it… I think it’s a solid business and something that the market needs, but it also needs the right people to operate it

Gro Intelligence—a New York- and Nairobi-based startup building what it claims is the world’s largest agricultural data platform—has installed a new CEO to replace founder Sara Menker, and has told its employees that it is unable to pay them, AgFunderNews has learned.Menker, who controls two board seats, is no longer CEO, but will have “ongoing responsibilities” at the firm she founded in 2012.CTO James Cariello has been named as the new CEO at Gro, which laid off 10% of its staff at the end of January and has been attempting to raise additional capital through a convertible bond [a bond that can be converted into shares at a later date] as a bridge until it gets more consistent and stable revenues.The company, individual board members and investors contacted by AgFunderNews have not responded to a request for comment.Menker had her company slack account deactivated a few days ago, one longtime Gro employee told us. “At an all teams meeting James stated unequivocally that they were unable to pay us.“We were told that Sara was no longer CEO but as founder would have ongoing responsibilities. These were not enumerated but I gathered from subsequent conversations that these related to business development and fundraising. We were told that Sewit was no longer with the firm in any capacity.”The call lasted about 10 minutes, “with a promise for more complete transparency,” added the employee.‘A fundamental mismatch between the product and the market’Gro, which generates the bulk of its revenues from key customer Unilever, had picked up some business with other packaged food companies and a number of quantitative and fundamental commodities investors, said the source.“It had positioned itself as a food security platform to a small Asian country and a country in the middle east exporting oil, without success. It had also attempted to engage the US government under a variety of guises but was only picking up bits and pieces of business here and there.”While Gro had lost a crop input company as a client, its current woes were not the result of a sudden loss of clients, said the source. “The renewal rates for the commodities investors were excellent.”Asked what had gone wrong, the source blamed a combination of the challenging funding environment and a “fundamental mismatch between the product and the market.“They were chasing deals for projects that resembled bespoke consultancy work as opposed to something that would generate replicable revenue streams