SoftBank-Backed Rappi Hit by Cuts, Trade-Secret Theft Claims
(Bloomberg) -- Rappi Inc., a SoftBank-backed tech company that has become one of Latin America’s most valuable startups, is grappling with layoffs as it also fights claims in a U.S. court that it stole trade secrets to develop its delivery business.
The Bogota-based company said it’s cutting 6% of its workforce as it adjusts its technology team. It’s also defending against a lawsuit in San Francisco federal court in which three Colombian entrepreneurs allege Rappi’s co-founder copied their plans when he developed the application.
Chief Executive Officer Simon Borrero is accused of stealing the trade secrets in 2015 when he and software development company Imaginamos were contracted to work on a delivery application that was to be called Kuiky. Borrero launched Rappi later that year, according to the suit.
Rappi said it would vigorously defend itself, calling the allegations “objectively incorrect” in a statement. While it declined to comment on the claims in detail, the company said it registered its trademark with Colombian authorities and its internet domain name in mid-2014.
Since its launch, Rappi has expanded across Latin America, contracting tens of thousands of couriers for on-demand delivery of everything from restaurant meals to pharmacy orders. It has since branched into other sectors, including finance technology. The company last year received an investment of as much as $1 billion from SoftBank’s Vision Fund. That put Rappi’s value at around $3.5 billion.
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