Benchmark, the Silicon Valley venture firm and early investor in Uber, has sued former CEO Travis Kalanick.
In a Delaware Chancery Court filing, originally identified by Axios’ Dan Primack, the suit alleges that Kalanick committed fraud, breach of contract and breach of fiduciary duty. Both Kalanick and Benchmark hold Uber board seats.
Accusing Kalanick of being “selfish” by packing Uber’s board with “loyal allies,” Benchmark alleges that the ousted CEO broke the law by trying to pave the way for his own return. Reports have suggested that Kalanick has been telling people that he’s “Steve Jobs-In it” and will be back at the helm.
If successful, the Benchmark lawsuit could kick Kalanick off the board of directors, making his return impossible.
Much of the complaint revolves around a June 2016 decision that expanded the size of Uber’s board from eight to 11. Kalanick was given the right to choose those seats. Kalanick eventually gave one of those to himself when he lost his CEO seat. The other two are still unfilled.
Benchmark is claiming that it would never have given Kalanick the power to choose those seats if the team had been aware of the gender discrimination, sexual harassment and other misconduct.
A spokesman for Kalanick is telling media outlets that the suit is “completely without merit and riddled with lies and false allegations.”
Uber has had a tumultuous 2017. After a former Uber employee wrote a story detailing sexual harassment and an environment that discriminated against women, former U.S. Attorney General Eric Holder oversaw an investigation into the company’s culture. This ultimately led to a series of executive departures and Kalanick’s resignation.
Uber has also been embroiled in a patent lawsuit with Waymo, the self-driving car division owned by the Google parent. Unsurprisingly, it’s another major point of contention in the new lawsuit. In a long list of items that Benchmark characterizes as “gross mismanagement” by Kalanick is his “personal involvement in causing Uber to acquire a self-driving vehicle start-up that, according to a confidential report not disclosed to Benchmark at the time (the ‘Stroz Report’), allegedly harbored trade secrets stolen from a competitor.”
The stakes are high because Uber is the most valuable private company at $70 billion. Benchmark and Kalanick are amongst the largest shareholders.
This is significant, not only because of Uber’s size but because Benchmark is considered one of Silicon Valley’s top venture firms, with the team including noted investor Bill Gurley. Venture capitalists typically cultivate a “founder friendly” image when competing to invest in the most promising startups, but it seems like Benchmark decided the ouster and lawsuit are worth it.
Other board seats belong to former Uber CEO Ryan Graves, co-founder Garrett Camp, TPG Capital, Nestle’s Wan Martello, Didi Chuxing’s CEO, Saudi Arabia’s Public investment fund and Arianna Huffington, who co-founded HuffPost.
Comment