German Firm Sues Israeli Startup Sellers Over Alleged Misrepresentation
Translated & summarized from NEWSru Israel by baba
German cybersecurity firm Link11 is suing former shareholders of Israeli startup Reblaze, which it bought for $18.5 million in January 2024, alleging they were misled about a major client. Link11 claims it was assured of a long-term contract with Marktplaats, but the client later decided not to renew. The German company estimates its damages at $9 million. The sellers deny the claims, stating the buyer is trying to avoid full payment.
The story in 5 lines · by baba
- German firm Link11 is suing Reblaze shareholders for $9 million over alleged deception in a $18.5 million January 2024 acquisition.
- Link11 claims sellers misrepresented the long-term commitment of major client Marktplaats, which later terminated its contract.
- The lawsuit was filed in the Tel Aviv District Court against 29 shareholders, including Reblaze co-founders.
- Shareholders deny the claims, calling the lawsuit an attempt to evade full payment.
- Link11 also cited inflated metrics, billing errors, and incomplete documentation as reasons for the suit.
German cybersecurity firm Link11 is suing the former shareholders of Israeli startup Reblaze, which it acquired in January 2024 for $18.5 million. In a lawsuit filed with the Tel Aviv District Court, Link11 alleges that the sellers misled the company, concealed crucial information, and provided false data, according to The Marker. Link11 estimates its damages at approximately $9 million, though it has paid court fees based on the last payment installment of about $2 million. The plaintiff requests this payment be credited towards its compensation and not considered a breach of contract. The lawsuit names all 29 shareholders who sold their stakes, including Reblaze co-founders Eyal al-Yardeni and Tzuriel Bar-Yochai, investment funds JAL Ventures, Sonae IM, and DataPoint Capital, as well as private investors such as former supervisor of banks Roni Hizkiyahu and David Hodak.
The primary complaint centers on Marktplaats, a Dutch classifieds service and one of Reblaze's largest clients. Link11 claims it was assured the client was committed long-term, which influenced revenue projections and the company's valuation. However, in November 2024, Marktplaats announced it would not renew its contract. Link11 emphasizes that the issue is not the client's departure itself, but the incomplete and distorted picture presented to them. The lawsuit also cites artificially inflated metrics, systemic billing errors, incomplete client documentation, and limited access to operational tools post-acquisition.
The shareholders, in their recent response, have labeled the lawsuit as unfounded, asserting that the buyer is attempting to evade full payment.
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