Israeli SaaS Company WalkMe Drags SoftBank-Backed Whatfix To Court

Bengaluru-based SaaS startup Whatfix has been dragged to court by its Israeli-origin and Nasdaq-listed rival WalkMe.

WalkMe has alleged that the SoftBank and Peak XV Partners-backed startup gained unauthorised access to its systems to interfere with customer relationships. Further, WalkMe alleged that Whatfix tried to make misleading advertising claims about its products and used its design mark without permission.

The listed Israeli entity filed the case on August 8 in the United States District Court for the Northern District of California. The last update on the matter dates back to October 23, when the court ordered WalkMe to amend its complaint after the Nasdaq-listed company sought a temporary restraining order against Whatfix.

According to court documents reviewed by Inc42, WalkMe might file its first amended complaint (FAC) or opposition to Whatfix’s motion to dismiss WalkMe’s complaint by November 22. 

In the original complaint, WalkMe accused Whatfix of interfering with its customer relationships and persuading those customers to violate their subscription agreements. The company added that those customers provided Whatfix employees with user accounts and log-in credentials.

Incidentally, the product head at Whatfix, Dipit Sharma, admitted in court to have attempted to access WalkMe’s system for ‘further competitive analysis’. According to Sharma’s testimony in the court, when he did access the WalkMe platform, he “made no attempt to access internal WalkMe systems or information [and] used the product in the same way any WalkMe customer would to observe its user interface.”

Further, WalkMe alleged that Apoorva Mittal, who is the director of customer success at the SoftBank-backed startup, used his credentials to “access and explore the following WalkMe services: WalkMe Menu Organizer, WalkMe ActionBot, WalkMe Users, WalkMe Workstation, WalkMe UI Intelligence, WalkMe Discovery, [and] WalkMe Organization.”

WalkMe alleged in its complaint that the Whatfix PL employees used their access to gain “unauthorised insight into and copy WalkMe’s system features, functionality, and data.”

The lawsuit against Whatfix comes as the startup reported a net loss of INR 328.33 Cr in the financial year 2022-23 (FY23), down 53% compared to a loss of INR 706.26 Cr in FY22. The SoftBank-backed startup’s operating revenue rose 65.14% to INR 284.74 Cr in FY23 from INR 172.42 Cr in FY22.

Founded in 2013 by Khadim Batti and Vara Kumar, Whatfix earns revenue by selling subscriptions and professional services to other businesses. The digital adoption platform offers solutions for onboarding new customers, effective training and better support to users through a contextual content display at the time of need.

Whatfix has raised a total funding of nearly $140 Mn to date. Besides SoftBank and Peak XV, the startup counts the likes of Eight Roads Venture, F-Prime Capital, Anupam Mittal, Cisco Investments, and Helion Ventures among its investors. It was last valued at $600 Mn.