Flexport Accuses Ex-Employees of Source Code Theft

The Risks of Competing with a Former Employer

Launching a startup designed to rival a previous employer carries inherent risks. A notable example involves Apple, which initiated legal action against a former chip design executive who subsequently established his own chip-focused startup; however, this case was ultimately dismissed in 2023.

Recent legal proceedings concerning logistics company Flexport and a newly formed competitor, founded by two ex-employees, further illustrate these potential dangers.

Allegations of Stolen Data

Flexport is currently pursuing legal action against the pair, asserting that they misappropriated thousands of its documents, including proprietary source code, to facilitate the creation of their competing venture, Freightmate AI. These accusations are vehemently contested by Freightmate.

Both companies specialize in leveraging technology to streamline and automate intricate logistics and shipping operations.

According to the lawsuit, filed last week in a California court, Flexport alleges that Freightmate’s COO, Yingwei Zhao, downloaded over 70,000 confidential Flexport documents after agreeing to co-found Freightmate with current CEO Bryan Lacaillade while still employed at Flexport.

The suit further claims that Zhao actively attempted to conceal his actions, such as utilizing Incognito Mode to copy and paste a list containing over 1,000 Flexport customers. It is also alleged that he downloaded Flexport’s source code from GitHub onto a USB drive.

Freightmate's Response

A Freightmate spokesperson communicated to TechCrunch, “We dispute Flexport’s claims and intend to vigorously defend ourselves in court.”

Flexport has declined to provide any comment on the matter.

Freightmate acknowledges possessing certain files originating from Flexport, but maintains that these files were “inadvertently retained” and were neither accessed nor utilized by Freightmate, as stated in the lawsuit.

Potential Impact and Legal Action

Flexport contends that Freightmate’s reported growth would have been “virtually impossible” without access to the information it believes was stolen. The company is seeking unspecified damages and a court injunction that could potentially halt Freightmate’s use of the allegedly misappropriated data.

Company Backgrounds

Flexport, headquartered in San Francisco, achieved an $8 billion valuation during a 2022 funding round. In 2023, the company secured a $260 million investment from Shopify, though the specific valuation was not disclosed.

Freightmate, located near Seattle, successfully raised a $5 million seed round in January 2025, led by Washington state venture capital firm Fuse Capital. A prior, undisclosed amount pre-seed round was spearheaded by Wischoff Ventures.

Here's a summary of the funding:

Flexport: $8 billion valuation (2022), $260 million from Shopify (2023)
Freightmate: $5 million seed round (January 2025 - Fuse Capital), undisclosed pre-seed round (Wischoff Ventures)