Atomico alleges ex-employee used its name to invest on behalf of own VC fund

Zennstrom, founding partner and CEO at Atomic, speaks during the "Slush" event in Helsinki

(Reuters) – Atomico Partners, a London-based venture firm founded by Skype co-founder Niklas Zennstrom, is suing a former employee and a consultant for allegedly secretly diverting potential Atomico investments to a venture firm that the two were building.

The employee, Pogos Saiadian, and the consultant, Wouter Gort, reached out to startups and potential investments using their Atomico credentials, according to a lawsuit filed Tuesday in state court in Delaware.

But once they got their attention, they ended up investing on behalf of Greyhound Capital Management LLC, a venture firm they started while working at Atomico, the suit alleges. All along, they could draw on Atomico’s reputation for backing high-profile ventures like “Angry Birds” developer Rovio and the Climate Corp, a weather data company that Monsanto bought last year for $1.1 billion, according to the suit. (Note: Saiadian and Gort are not associated with the firm Greyhound Capital that invests in Asia and has a .net Web address.)

While many venture capitalists head off and start their own firms, lawsuits remain rare. Most VCs considering striking out on their own carefully distinguish between work for their current employers and their own ventures.

Saiadian and Gort didn’t respond to emails and LinkedIn messages from Reuters requesting comment on the suit, which alleges aiding and abetting breach of fiduciary duty, misappropriation of trade secrets, unjust enrichment, civil conspiracy, and other claims.

In emails to potential investors in its fund, Greyhound seems to have tried to keep the wraps on its activities, according to the lawsuit.

Its plans were secret, Gort wrote in an email to one potential investor earlier this year, “because we still work at Atomico,” the suit alleges. The men also debated using Confide, a service that sends and receives texts and then destroys them automatically, according to the suit.

The lawsuit claims that Saiadian and Gort used Atomico’s proprietary information to identify potential targets, and then traded on their ties with Atomico to build relationships with those companies, in violation of their employment agreements.

In several instances, the duo ended up investing on the part of Greyhound, according to the suit.

Among those investments: San Francisco-based Homejoy, a cleaning service whose backers include Google Ventures and Redpoint Ventures; Los Angeles-based Dollar Shave Club, an online retailer whose backers include Pritzker Group Venture Capital and Venrock; and Athens-based Taxibeat, a app-based transportation service whose backers include Belgium-based Hummingbird.

Last year Greyhound backed Homejoy with $250,000, Dollar Shave with $300,000, and Taxibeat with 70,000 euros.

A spokeswoman for Homejoy confirmed the investment but declined to comment further. Michael Dubin, Dollar Shave’s CEO, said he was “never under the impression that Atomico was investing.” Taxibeat didn’t immediately respond to requests for comment.

Additionally, Saiadian and Gort fostered a relationship with an individual who owned shares of rides-on-demand service Uber, with a goal of purchasing shares in a secondary transaction on behalf of Greyhound, the lawsuit alleges. Ultimately, there was no transaction with Greyhound, Gort, or Saiadian, an Uber spokeswoman said.

Before they left Atomico, Saiadian and Gort deleted “thousands of files” from their Atomico computers, along with emails, the suit alleges. They also uploaded Atomico information to cloud-based storage accounts such as Dropbox.

Saiadian founded Greyhound Capital in November 2012, according to the lawsuit, two years after he joined Atomico and a year after Gort started providing consultancy services. Atomico suspended Saiadian last month, the suit states.

Zennstrom founded Atomico in 2006, after previously founding file-sharing company Kazaa and online communication service Skype.

Saiadian’s LinkedIn profile states that he was an “investment professional” for Atomico from September 2010 to March of this year. Prior to that, Saiadian was an associate at Silver Lake Partners from September 2008 to August 2010, the profile states.

Gort’s LinkedIn profile states that he has been a “principal” at Atomico from January 2011 to present. Previously, he was “founding partner” of Gort, Franssen & Partners from January 2008 to June 2011, the profile states.

(Editing by Edwin Chan and Eric Walsh for Reuters. Additional editing and reporting by Lawrence Aragon for peHUB)

Photo: Niklas Zennstrom, founding partner and CEO at Atomic and co-founder and former CEO at Skype, speaks during the “Slush” event at Kaapelitehdas in Helsinki, November 13, 2013. REUTERS/Roni Rekomaa/Lehtikuva

Related Posts

Leave a Reply

PEHUB Community

Join the 12503 members of peHUB to make connections, share your opinion, and follow your favorite authors.

Join the Community

Look Who’s Tweeting

Psst! Got any hot tips?

  • This field is for validation purposes and should be left unchanged.

PE HUB News Briefs

RSS Feed Widget

Marketplace

VCJ Headlines (subscribers only)

RSS Feed Widget

Buyouts Headlines (subscribers only)

RSS Feed Widget

Reuters VC and PE feed

RSS Feed Widget