SoftBank-backed Whatfix faces legal action initiated by Israeli company WalkMe, which accuses Whatfix of unauthorized system access and interference with customer relationships.
The SaaS startup, headquartered in Bengaluru and San Jose, secured backing from SoftBank Vision Fund and Peak XV Partners. Allegations include misleading advertising claims and unauthorized use of WalkMe’s design mark.
The United States District Court for the Northern District of California has directed WalkMe to amend its complaint, denying a temporary restraining order earlier. WalkMe, valued at approximately USD 834 million, is anticipated to file its financials for Q3 on November 14.
The legal dispute, initiated with a complaint on August 8, accuses Whatfix of customer relationship interference and persuading clients to breach subscription agreements. WalkMe alleges undisclosed customers provided Whatfix with login credentials.
Amongst other claims, WalkMe accuses Whatfix of utilizing misleading comparative advertising and unauthorized use of WalkMe’s logo. WalkMe’s Q2 total revenue reached USD 66.2 million, a 10% YoY increase, and reported over USD 245 million revenue in the previous fiscal year.
The lawsuit coincides with Whatfix gaining attention for potential new funding rounds, as its annual recurring revenue hits USD 70 million. Private equity firm Warburg Pincus expresses interest in investment, while discussions with other investors are in early stages. Whatfix, previously valued at USD 568 million after a USD 90 million funding round led by SoftBank in 2021, faces legal challenges in the competitive US SaaS market.