NextMed accuses Indian-Canadian businessman and his partner of creating a copycat company promoting weight loss
Grocery delivery company Instacart Indian-Canadian cofounder Apoorva Mehta has been accused in a lawsuit of using stolen trade secrets to create a healthcare startup that was a copy of an existing company.
Hello Logistics Inc, which operates under the name NextMed, sued Mehta, his business partner Tejasvi Singh, and their company Cloud Health Systems over allegations of misappropriation of trade secrets, copyright infringement and other claims. Both companies run websites promoting weight loss.
Read: Instacart co-founder Apoorva Mehta calls it quits (July 25, 2022)
“Wanting in on NextMed’s success, and in search of venture capital funding for a new project,” Mehta teamed up with Singh, “to do what Mehta later said he considered ‘unethical but not illegal’— create a copycat company,” NextMed said in the complaint filed Dec 19 in Manhattan federal court.
Singh, a cofounder of NextMed, collected some of the company’s closest held trade secrets under the guise of gathering the information as part of due dilligence for investors, according to the complaint.
Mehta and Singh then used the information to create a company that does business as Sunrise, with a copycat website, according to the complaint.
They also lined up vendors and implemented NextMed’s highly confidential customer acquisition and other strategies, “in mere weeks,” NextMed claimed in the complaint.
Mehta’s new company which was launched a few weeks ago, has already raised $30 million from two venture capital firms, NextMed said.
NextMed is seeking an order to shut down the Sunrise website and unspecified monetary damages.
The case is Helio Logistics Inc. v. Mehta, 7:22-cv-10047-NSR, US District Court, Southern District of New York (Manhattan).
Mehta founded Instacart in 2012. The demand for the company’s delivery model skyrocketed due to the coronavirus pandemic. This August, Mehta stepped down as executive chairman as the San Francisco-based online delivery giant was set to go public.
However, Forbes reported that although the company has not formally withdrawn its SEC filing, it has canceled plans to go public this year. The company is reportedly waiting for more favorable market conditions for an IPO.
In 2020, Mehta, 36, entered the coveted list of billionaires. Forbes reported then that Mehta’s addition to the list comes after the San Francisco-based unicorn’s value rose from $7.9 billion to $13.7 billion.
Forbes estimates that “Mehta owns a 10% stake, making him the newest member of the three comma club with a net worth of $1.2 billion.”