Flipkart’s acquisition of Israeli startup Upstream last year – the first major acquisition post Walmart takeover – has landed the online retail giant in a legal tangle. Wolet Capital Corp (WCC), an investment bank that mainly focuses on US-India accusation deals, has sued Flipkart for non-payment of advisory fees.
WCC claims that it was one of the main advisors for Flipkart in Upstream accusation. It has filed the lawsuit in a New York district court, business daily Economic Times (ET) claims to have accessed the copy of the lawsuit. ET report claims that WCC has alleged breach of contract along with other lapses and has sought $800,000 as financial compensation.
The lawsuit further claims that WCC had spent months in discharging the advisory services and accordingly identified Israeli analytics startup Upstream as a lucrative acquisition target for Walmart owned Flipkart.
“The services were necessary for and led directly to the acquisition of Upstream. However, when the transaction closed and WCC sought payment for the Services, it was refused,” the investment bank said in the lawsuit.
WCC has identified Aakash Goyal and Sankalp Gupta – both senior executives in Flipkart – for initiating the investment bank in the advisory role. Both senior executives had assured of payment of advisory fees once the transaction was closed, the investment bank added.
Wcc was supposed to receive to $200,000 as the advisory fees from the Walmart owned company, as per the lawsuit.
Flipkart has so far refused to comment on the matter on the pretext that the issue is subjudice.
Flipkart had acquired Tel Aviv based retail analytics company Upstream Commerce for nearly $30-40 million in September last year. The online retail behemoth was hoping to serve its customers better through this acquisition. Upstream uses cloud based automated competitive pricing to offer better pricing options to customers.