Startups and Corporate Ethics: Flexport Accuses Ex-Employees of Stealing Code to Build Rival
San Francisco-based logistics startup Flexport, valued at $8 billion in 2022, has filed a lawsuit against two of its former employees, accusing them of stealing source code and confidential data to create a competing startup, Freightmate AI. This was reported by TechCrunch. The scandal, which erupted in March 2025, raises pressing questions about corporate ethics and intellectual property protection in the tech industry.
Flexport claims that Freightmate AI is “a product of theft, not ingenuity.” According to the lawsuit filed on March 12 in a California court, Freightmate COO Yinwei Zhao, while still employed at Flexport, downloaded more than 70,000 confidential documents — including a list of 1,000 clients — using incognito mode to conceal his actions. Zhao also allegedly copied the company’s source code from GitHub onto a USB drive just days before his departure.
Together with Freightmate CEO Brian Lacaillade, who had left Flexport earlier, they allegedly began preparing the rival venture while still at the company, registering the domain freightmate.ai three months before their resignation.
Freightmate AI, based near Seattle, has already raised $5 million in a seed round in January 2025 from venture fund Fuse Capital. The startup is developing technologies to automate logistics and document processing, directly competing with Flexport, which uses AI to optimize global supply chains. A Freightmate representative denied the allegations, telling TechCrunch: “We dispute Flexport’s claims and intend to vigorously defend ourselves in court.”
This is not the first case of its kind in the industry. Similar lawsuits over corporate espionage were recently filed by Rippling against Deel and Apple against a former engineer — although the latter case was dropped in 2023. Flexport is not only seeking the return of stolen materials but also an injunction preventing Freightmate from using its data. “We welcome fair competition, but Freightmate’s actions are unlawful,” said the company’s legal team.
The scandal highlights the growing tension in the startup ecosystem, where former employees often found competitors — but the line between inspiration and theft remains blurry. Will Flexport be able to prove its claims, or will Freightmate clear its name in court? This case could set a precedent for future industry disputes.
