Vancouver-based Nexii Building Solutions is a green construction tech company tackling environmental issues through sustainable building products.
Nexii achieved unicorn status last year following a US$45 million funding round led by Honeywell.
The company announced an additional US$35 million from Horizon Technology Finance Corporation and Trinity Capital in July, which raised its valuation to $2 billion.
“Since our original commitment last year, Nexii has made significant strides within the construction industry through its innovative, efficient and environmentally conscious building solutions, positioning it well to further expand its operations,” Gerald Michaud, President of Horizon, stated at the time.
“The Nexii team continues to make significant progress with their planet-friendly building solutions, and we are excited to increase our commitment to this rapidly growing company,” agreed Ron Kundich, Chief Credit Officer of Trinity Capital.
However, a recent lawsuit filed by a “key, early investor” may stymie the startup’s momentum.
A subsidiary of the Symphony Group outlines in a civil claim with the BC Supreme Court “a broad range of problems it says it endured over the course of three years to fulfil an early-stage licensing agreement,” according to a report from Business in Vancouver.
This litigation is “eye-catching because of the initial scope of its vision and its subsequent utter collapse,” suggests BIV editor-in-chief Kirk LaPointe. “These agreements are key parts of the path of business development, and when they falter, they have a way of deflating much more than the arrangement between the parties to the failed agreement.”
The lawsuit alleges Nexii “courted other investors by pointing to the [Symphony Advanced Building Technologies] arrangement and built its business on this basis, all the while without memorializing the letter agreement into a formal licensing contract,” LaPointe notes.
In its defence, Nexii claimed to BIV that “Following lengthy negotiations between both parties, no definitive agreement was finalized or signed,” concluding that “the claim has no merit.”
Disagreeing entirely, SABT goes as far as to assert that much of Nexii’s early growth was due to this initial relationship.
And though Nexii downplays SABT’s involvement, LaPoint makes it clear the company played a salient role.
There were weekly meetings to discuss business development. SABT … was provided confidential information on intellectual property and patents that it could use in discussions with its own investors. [Nexii] provided Symphony CEO Gurdeep Kainth with the title of executive director of global licensing association and a company email address, and brought him regularly into conference calls and meetings to discuss his experience as a licensee.