An investor in Jumio sued Facebook co-founder Eduardo Saverin and other directors of the mobile-payment company accusing them of mismanaging the startup and duping shareholders about its prospects.
Bad management drove the Palo Alto, California-based company into bankruptcy after it was forced in 2015 to restate two years' worth of earnings, shareholder Bloso Investments Ltd. said in the complaint filed in Delaware Chancery Court.
Saverin, who became a billionaire through Facebook's initial public offering, extolled Jumio in 2012 as growing faster in its infancy than the social-media network he helped create in 2004, and predicted the company would be highly profitable. Saverin's statements and ones made by other directors misled Bloso officials about Jumio's operations and duped them into investing $5 million in the company, according to the lawsuit filed Sept. 29.
"There is no merit to these baseless allegations," Ian Campbell, a spokesman for Saverin, said in an e-mail. "Mr. Saverin acted responsibly in fulfilling his fiduciary responsibilities as a director of Jumio. He was harmed as much as, if not more than, any other investor of the company by former management's actions and is in fact contemplating his own claims against them."
Jumio filed for bankruptcy in March, about a year after Saverin and Andreessen Horowitz Fund II LP invested $15.5 million in the company. Saverin tried to buy the company out of bankruptcy but was outbid in May when Centana Growth Partners LP won a court-supervised auction with an offer of $850,000.
Bloso, based in the British Virgin Islands, held more than 3.9 million Jumio shares, according to bankruptcy court filings. Saverin held more than 2.8 million shares in the company, which makes verification software for online transactions.
Saverin also has invested in other startups including Anideo, a developer of mobile applications, and ShopSavvy Inc., a price-comparison service. In February, he joined a $15 million round of financing for Indonesian e-commerce startup Orami.
The case is Bloso Investments Ltd. v. Eduardo Saverin, CA 12787, Delaware Chancery Court (Wilmington). The bankruptcy case is In re Jumio Inc., 16-10682, U.S. Bankruptcy Court, District of Delaware (Wilmington).