WalkMe Uses Litigation To Suppress Competition: Whatfix CEO To Employees

Amid an ongoing legal battle with WalkMe, the Whatfix founder and CEO, Khadim Batti, has told his employees that litigation was a common competitive tactic in international markets and that the Israeli SaaS major has a history of doing the same.

“We believe that our success in the marketplace has led to this litigation. This legal matter does not impact our day-to-day operations or our ability to serve our customers,” Batti said in an email to Whatfix’s employees, ET reported, citing the email.

“WalkMe has a history of resorting to legal action against competition,” Batti added. 

The email comes as Indian media widely reported the ongoing legal proceedings in the United States District Court for the Northern District of California in the US between the two SaaS companies.

The Bone Of Contention

WalkMe has levelled several allegations against the SoftBank Vision Fund and Peak XV Partners-backed startup, Whatfix. In a complaint filed on August 8, the Nasdaq-listed Israeli company alleged that Whatfix gained unauthorised access to its systems, sought to interfere with customer relationships, made misleading advertising claims about its products and used its design mark without permission.

According to the court documents accessed by Inc42, WalkMe alleged that Whatfix had interfered with multiple WalkMe customer relationships and induced those customers to breach their subscription agreements with WalkMe. 

The company added that those customers provided Whatfix employees with user accounts and log-in credentials. WalkMe further alleged that the Whatfix 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.

The legal tussle also comes as the Indian SaaS startup is looking to raise a new funding round and is in discussions with prospective investors. Whatfix has raised $140 Mn in funding so far from investors, including SoftBank, Peak XV, Eight Roads Venture, F-Prime Capital, Anupam Mittal, Cisco Investments and Helion Ventures.

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