It is risky to create a startup that competes with your previous employer. For example, Apple once sued a former Chip Design executive who founded his own chip startup in a case that was dropped in 2023.
Recent cases of Logistics Unicorn Flexport and a new competitor formed by two former employees shed light on those risks.
Flexport is suing the pair claiming they stole thousands of documents along with source code to create their own rival startup, Freightmate AI.
Both startups use technology to automate complex logistics and shipping processes.
Flexport believes that freight mate COO Yingwei Zhao has downloaded more than 70,000 confidential Flexport documents after agreeing to form a freighter with current CEO Bryan LaCaillade, Flexport said in a lawsuit filed in a California court last week.
Flexport claims Zhao took steps to hide the track, including using Incognito mode in his browser to copy a list of over 1,000 Flexport customers. The lawsuit alleges that Zhao downloaded Flexport source code from GitHub to a USB drive.
The freight mate admitted to owning several files from Flexport, but according to the lawsuit the file was “inadvertently held and stated that it was not accessed or used by the freight mate.
Flexport declined to comment. The freight mate did not respond to requests for comment.
Flexport claims that recent growth, promoted by cargo mates, was “virtually impossible” without information claiming it was stolen. He is suing for unspecified damages and an injunction from the court. This can be used to stop a cargo ship from using data that is allegedly stolen.
Flexport is based in San Francisco and was valued at $8 billion in the 2022 funding round. Most recently, in 2023, it raised a $260 million round offered by Shopify with a private rating.
The freight mate is based near Seattle and in January 2025 collected a $5 million seed round led by Washington VC company Fuse Capital. The pre-seed round, where that amount was private, was led by Winshoff Ventures.
