Last week, it was reported that DealMaker had filed a lawsuit against Issuance, claiming that Issuance had utilized a relationship between the two firms to gain access to intellectual property to launch a similar service.
DealMaker is a tech-enabled platform that helps firms raise money online. DealMaker reports over 689,000 investments processed, with more than $1.7 billion raised using its tech stack. DealMaker has grown very fast as its services have been leveraged by issuers using Reg A+, Reg D, Reg CF, and other exemptions. DealMaker also operates a broker-dealer.
Issuance is a platform that has focused on Reg A+ offerings – a securities exemption that allows a company to raise up to $75 million via an online offering. Issuance reports having raised over $250 million to date, describing its services as a “proprietary all-in-one tech stack to manage the largest capital raises in the Reg A+ industry.”
The one-time partners are now at odds as DealMaker alleges that Issuance accessed the DealMaker software “under false pretenses. In doing so, they gained access to DealMaker’s confidential information, Intellectual Property, and trade secrets.”
CI has received a response regarding DealMaker’s claims from Issuance founder and CEO Darren Marble, who states the allegations are unfounded and without merit. Marble told CI:
“As DealMaker knows, the claims in this lawsuit are entirely without merit. We look forward to our day in court and winning. Issuance has been experiencing rapid growth as a result of delivering a superior product at a discount to the market. We pioneered our own technology that allows retail investors to seamlessly checkout for securities in under a minute, with Apple Pay and Google Pay as payment methods, driving better outcomes for our clients. In addition to our industry-leading Reg A+ product, we recently launched a Reg D 506(c) product which has been quickly adopted by both US and Canadian issuers seeking to raise growth capital quickly and efficiently. We look forward to expanding our market share and continuing to deliver an investment platform that delights both issuers and investors.”
The complaint by DealMaker has been filed in the US District Court, Central District of California.