Establishing a startup that competes directly with a former employer can be a high-risk endeavor. A notable example is Apple, which previously sued a former chip design executive who founded a rival chip startup, in a case that was dismissed in 2023.

A recent lawsuit involving logistics unicorn Flexport and a newly formed competitor, founded by two former employees, highlights the potential risks associated with such ventures.

Flexport is taking legal action against the pair, alleging that they misappropriated thousands of confidential documents, including the company’s source code, to establish their own rival startup, Freightmate AI.

Both Flexport and Freightmate AI utilize technology to streamline complex logistics and shipping processes.

According to Flexport, Yingwei Zhao, Freightmate’s COO, downloaded over 70,000 confidential documents after agreeing to co-found Freightmate with CEO Bryan Lacaillade, as stated in the lawsuit filed in a California court last week.

Flexport claims that Zhao attempted to conceal his actions by using Incognito Mode on his browser to copy-paste a list of over 1,000 Flexport customers. The lawsuit also alleges that Zhao downloaded Flexport’s source code from Github onto his USB drive.

Freightmate acknowledged possessing some Flexport files, but claimed they were “inadvertently retained” and not accessed or utilized by the company, according to the lawsuit.

Flexport declined to comment on the matter, while Freightmate did not respond to a request for comment.

Flexport asserts that Freightmate’s recent growth would have been “virtually impossible” without the allegedly stolen information. The company is seeking unspecified damages and an injunction from the court to prevent Freightmate from using the misappropriated data.

Headquartered in San Francisco, Flexport was valued at $8 billion in a 2022 funding round. The company recently secured a $260 million funding round from Shopify in 2023, at an undisclosed valuation.

Freightmate, based near Seattle, raised a $5 million seed round in January 2025, led by Washington state VC firm Fuse Capital. The company’s pre-seed round, whose amount was not disclosed, was led by Winschoff Ventures.