Benchmark Pens Letter and Sheds Light on Uber Lawsuit
Benchmark Capital—one of Uber’s earliest investors—released a two-page letter to the ride-sharing company’s employees today, explaining why the venture capital firm is suing former CEO Travis Kalanick.
Last week, the major Uber shareholder filed a lawsuit against Kalanick for fraud to remove the co-founder from the company’s board of directors. Kalanick resigned from Uber in June following pressure from investors, but the former CEO has continued to be embroiled in controversy.
In the open letter, Benchmark called out Kalanick for “undermining” Uber’s search for a new CEO, questioning his intentions and his leadership of the company.
“Indeed, it has appeared at times as if the search was being manipulated to deter candidates and create a power vacuum in which Travis could return,” the letter reads.
The firm claimed they warned Kalanick over a month ago they would resort to litigation if the former CEO didn’t modify the company’s voting agreement and step away from day-to-day operations. Benchmark said they waited and watched “as things deteriorated even further.”
“Eventually we felt that we could wait no longer and took action. It is our hope that this lawsuit will break the past, persistent patterns of dysfunctional behavior — making it possible to create a truly independent board and hire a truly great CEO,” said Benchmark.
However the firm stated in the letter the lawsuit “isn’t about Benchmark versus Travis,” and that their decision was “motivated by a deep desire to do what is best for Uber.”
Kalanick responded to Benchmark and called the company’s actions “hostile.” In a statement to Axios, he said he was both “disappointed and baffled” in the company.
“Since 2009, building Uber into a great company has been my passion and obsession. I continue to work tirelessly with the board to identify and hire the best CEO to guide Uber into its next phase of growth and ensure its continued success,” said Kalanick.
Not all investors are on board with Benchmark’s move. On Friday, Axios reported that that three Uber investors sent Benchmark a letter voicing their concerns that the lawsuit will “cost the company public goodwill,” and asked the firm to forfeit their board seat.