Benchmark Capital Sues Former Uber CEO Travis Kalanick For 'Selfish' Fraud

Ryan Graves is stepping down as SVP but will stay on the board.                  LinkedIn

Ryan Graves is stepping down as SVP but will stay on the board. LinkedIn

Uber co-founder and former chief executive Travis Kalanick is being sued for fraud by Benchmark Capital, one of the ride-hailing giant's earliest investors.

Kalanick was trying to "pack Uber's board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO", Benchmark said in the lawsuit. In addition, Benchmark alleges that Kalanick has refused to follow through on a previous agreement to make the two board seats open to approval by the entire board of directors.

Benchmark further says that in moving to add the three board seats previous year, Kalanick "intentionally concealed and failed to disclose his gross mismanagement and other misconduct at Uber" which they say included "pervasive gender discrimination and sexual harassment".

Benchmark now says they never would have allowed the expansion if they'd known about widespread allegations of sexual harassment within the company, and the pending conflict with Alphabet subsidiary Waymo over the alleged theft of trade secrets related to self-driving cars.

Kalanick's pugnacious style largely defined Uber's approach and helped it become a transportation colossus valued at $68 billion, the largest private firm backed by venture capitalists in the world.

Graves thanked staff and former Uber CEO Travis Kalanick.

Before Kalanick resigned, Uber added three new seats to its board.

The suit centers around the creation of three additional board seats at Uber in June 2016.

Axios says the suit stems from a June 2016 move to expand the size of Uber's board of voting directors from eight to 11, with Kalanick having the sole right to designate those seats. This is continued evidence of Benchmark acting in its own best interests contrary to the interests of Uber, its employees and its other shareholders.

Benchmark's lawsuit marks a rare instance of a Silicon Valley investor suing a central figure at one of its own start-ups.

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