Startup Street: It’s Nikola Vs Tesla In $2 Billion Truck Lawsuit!
Here’s what went on this week on Startup Street.
This week on Startup Street we have a startup that is suing Tesla for $2 billion for copying its truck design. Wonder.Legal, a European tech startup has finally launched in India; a survey report shows the preferred route of exit for Indian startups and Masayoshi Son’s SoftBank may give India its next unicorn. Here’s what went on.
Startup Claims Tesla Copied Its Truck Design
Tesla Inc. is being sued for $2 billion by an Arizona-based startup that claims that Elon Musk’s firm intentionally copied the design features of its tractor trailer.
Nikola Corp., a startup that makes hydrogen-powered trucks, filed a complaint in Arizona earlier this week showing alleged similarities between their own design and the electric semi-truck that Tesla released last year. The four year-old closely held startup said that Tesla copied the windshields, doors and the look of its Nikola One hydrogen-electric hybrid truck that was unveiled in 2016, according to Bloomberg.
Nikola said that it first sent a letter to Tesla after noticing the design similarities where it asked them not to unveil their semi-truck till a resolution was reached. The startup added that the similarities created confusion in the market and hurt its ability to attract partners and investors.
A Tesla spokesperson denied allegations in an emailed statement to Bloomberg demereting the lawsuit.
The Nikola One has pre-bookings worth over $6.3 billion and is expected to go into production 2020. Tesla, on the other hand, plans to begin production of its semi truck next year.
Both companies are named after futurist inventor Nikola Tesla, who developed the modern design of an alternating current supply systems, and is regarded as one of the greatest scientific minds ever.
Wonder.Legal Makes It To India
Legal-technology firm Wonder.Legal has finally launched its services India in an effort to create personalized legal documents in real time, for a fraction of the money charged by Indian law firms.
The Europe-based startup has 30 personal and work templates such as loan agreements, lease agreements, terms and conditions for a website and even resignation letters. These encrypted documents can be saved and downloaded, costing anywhere between Rs 99 to Rs 999, the company's website shows.
“India is a very important market for us and we are pleased to expand our operations here. As a country, India has a lot of potential in terms of the legal domain,” Jeremie Eskenazi, founder and chief executive officer of the startup said in a statement. Born in 2014, the startup has successfully established itself in other markets such as France, Italy, Spain, Germany, Brazil, Mexico, Australia, Canada, U.K. and U.S.
It also plans on expanding to Chile, Ukraine, Sweden and Thailand.
The startup with its team of 30 lawyers does not give any legal advice though. “We are not a substitute for a lawyer; rather, we offer a technical solution for creating documents. We do not give legal advice and we do not tell you which document to choose or how to complete it,” the website says.
M&A: Preferred Mode Of Exit For Startup Founders?
Indian startup founders prefer getting bought out over listing their firms in the capital market. That's according to a recent survey of over 100 startup founders by InnoVen Capital.
Forty six percent of the respondents chose a merger or acquisition as their preferred mode of exit, according to InnoVen Capital’s Startup Outlook Report 2018. The mergers and acquisitions route continued to be on top of the list for the second straight year.
Their next bet was an initial public offering in India with nearly a quarter of the respondents preferring it. Another 16 percent preferred a listing too, but in foreign markets. Only 14 percent of the respondents felt that remaining private was their best option.
Unicorn-To-Be
The company behind insurance comparing startup PolicyBazaar may soon become a unicorn after a possible investment from Masayoshi Son’s SoftBank, reported the Times of India, citing people privy to the matter.
Softbank is slated to invest $200 million or close to Rs 1,300 crore in PolicyBazaar, the report said. EtechAces Marketing and Consulting, which ownes PolicyBazaar and Paisabazaar, could be valued over $1 billion after the capital infusion, the same people stated.
Emails to PolicyBazaar remained unanswered at the time this article was published.
The investment will be made through SoftBank’s $100-billion Vision Fund which has investments in Didi-Chuxing, Paytm and Flipkart. SoftBank will soon sell its 20 percent stake in Flipkart to a group led by Walmart Inc., according to a Bloomberg report.
SoftBank’s investment in PolicyBazaar will be accompanied by a large investment from Info Edge Ltd.—owner of websites like Naukri.com and 99acres.com—to balance out the ownership pattern and adhere to the rules of Foreign Direct Investment, the TOI report added.
A Rs 500 crore investment into the startup last year, valued it at $500 million.