Creating a startup that competes with your former employer can be risky. Apple, for example, once sued a former chip design executive who founded his own chip startup in a case that was dropped in 2023.
A recent case involving logistics unicorn Flexport and a new competitor formed by two former employees sheds light on those risks.
Flexport is suing the pair alleging that they stole thousands of its documents along with its source code to create their own rival startup, Freightmate AI.
Both startups use technology to automate complex logistics and shipping processes.
Flexport says it believes Freightmate’s COO Yingwei Zhao downloaded over 70,000 confidential Flexport documents after he agreed to form Freightmate with now-CEO Bryan Lacaillade, Flexport said in the lawsuit, which was filed last week in a California court.
Flexport claims that Zhao took steps to hide his tracks like using Incognito Mode on his browser to copy-paste a list of over 1,000 Flexport customers. The suit alleges that Zhao also downloaded Flexport’s source code from Github onto his USB drive.
Freightmate admitted to being in possession of some files from Flexport but said the files were “inadvertently retained” and not accessed or used by Freightmate, according to the suit.
Flexport declined to comment. Freightmate didn’t respond to a request for comment.
Flexport claims recent growth touted by Freightmate would have been “virtually impossible” without information it insists was stolen. It is suing for unspecified damages and an injunction from the court, which could be used to stop Freightmate from using the allegedly stolen data.
Flexport is based in San Francisco and was valued at $8 billion in a 2022 funding round. It most recently raised a $260 million round provided by Shopify at an undisclosed valuation in 2023.
Freightmate is based near Seattle and raised a $5 million seed round in January 2025 led by Washington state VC firm Fuse Capital. Its pre-seed round, whose amount was undisclosed, was led by Winschoff Ventures.
