Created in 1620, the street takes its name after the Silk Company (Silkecompagniet) which was founded at the initiative of Christian IV in 1618. The company operated a silk manufactory at the corner with Pilestræde. A row of 14 identical houses with a total of 50 apartments was also constructed in the street. They were designed by Hans van Steenwinckel the Younger and used for housing a group of German silk weavers who had been called to Denmark by the king to boot the silk production. The Silk Company was most likely already shut down in 1631. Some of the townhouses and a building in Pilestræde were then converted into a domus misericordiæ or central poorhouse. It handed food and money out to the poor once a week and also functioned as an employment agency. It also contained a Hackle Room (heglestue) which was used for preparation of flax that was handed out to the poor. The facility relocated to Almindelig Hospital in 1769.
