Bolt Financial Inc., the payments firm best known for its founder’s inflammatory Twitter threads accusing Silicon Valley of being governed by “mob bosses,” is being sued by one of its most well-known clients.
Authentic Brands Group claims that Bolt not only failed to deliver promised technologies, but also that the clothing retailer lost more than $150 million in online sales as a result of Bolt’s integration with Forever 21. According to the complaint, Bolt sought money at increasingly high valuations by “consistently overstating” the scope of its integration with ABG’s brands to give the impression that it had more consumers than it did and to persuade investors to fund the startup’s expansion.
Because Bolt’s business model relies on having a broad network of customers, the charges cast a pall over the tumultuous payments firm, which was reportedly valued at $11 billion by investors.
Bolt responded to the complaint in a filing, claiming that ABG’s assertions are unfounded and that they are “a clear attempt” to renegotiate the terms of the firms’ contracts. ABG’s spokesperson did not immediately respond to a request for comment.
According to the lawsuit, ABG’s agreement with the business allows it to purchase up to 5% of Bolt for $29 million. According to Bolt’s filing, it is not required to sell. That stake would be worth around $500 million at Bolt’s present price.
“We love all of our customers and we are thankful for the wonderful partnership with Forever21 and Lucky,” Bolt’s Chief Executive Officer Maju Kuruvilla said in a statement. “It’s clear that Authentic Brands Group has confidence in Bolt’s future as they are fighting to own a meaningful percentage of our business.”
The complaint is dated March 4 and has not been previously reported. The case is set to go to court by October.
The lawsuit comes during a chaotic time for Bolt. Soon after the company raised its last round of funding in January, its 27-year-old co-founder, Ryan Breslow, tweeted a series of incendiary accusations against several Silicon Valley luminaries, claiming that the industry was a “boys club” run by “mob bosses.” Weeks later, Breslow resigned, in a move he said was unrelated to his tweets, and took on a new role as chairman of the company.
The complaint is dated March 4 and has not been previously reported. The case is set to go to court by October.
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