Uptake Technologies allegedly has engaged in a "ruthless scheme to poach" executives and trade secrets from General Electric, according to a lawsuit the struggling conglomerate filed Monday against the Chicago-based data analytics firm.
The lawsuit says the alleged "scheme" started roughly a year ago, after Caterpillar and another company ended their investments in Uptake and it laid off about 50 people.
Uptake, launched in July 2014 by Groupon co-founder Brad Keywell, analyzes data from heavy machinery. GE began gathering and analyzing data from industrial equipment in 2011, according to the lawsuit, filed in a federal court in Chicago. GE ultimately formed a separate business unit, called GE Digital, to handle that work.
Starting in July 2017, Uptake repeatedly approached GE about entering into a business transaction with GE Digital, according to the lawsuit.
"While Uptake's specific proposal changed over time, ranging from a possible joint venture to a potential asset sale, its desire properly or improperly to gain access to GE Digital's intellectual property, clients, and employees is clear," the lawsuit says. "Each time, GE rejected such attempts."
Uptake then allegedly began to "poach" executives from GE, hiring at least 13 employees, many of whom were senior-level executives, according to the lawsuit.
Ganesh Bell, whom Uptake brought on as president in February, is allegedly one of them. He was named as a defendant in the lawsuit, as was Uptake's chief financial officer, Kelly McGinnis. Other senior-level Uptake employees named as defendants are Alex Paulson, Jay Allardyce, Ravi Marwaha and Scott Bolick.
The lawsuit alleges that the employees "will inevitably disclose GE's trade secret information," if they haven't already.
"Uptake's scheme appears obvious," according to the lawsuit. The company allegedly is either trying to weaken GE through unfair competition and force it to accept one of Uptake's proposed business deals or replace GE in the marketplace, the lawsuit says.
Representatives for Uptake did not respond immediately Monday to requests for comment.
The lawsuit comes days after GE announced plans to establish an independent company focused on connected industrial machines.
GE has struggled in recent years as it seeks to restructure. The company, which posted a loss of $22.8 billion in the third quarter, ousted its previous CEO this fall after just over a year on the job, and it faces a federal accounting probe, among other challenges.
After reports that GE hired an investment bank to organize an auction of its digital assets earlier this year, Uptake launched a webpage that targets GE customers, featuring a video with Bell.
Though Uptake has been well-funded and is one of Chicago's few tech companies valued over $1 billion, it has faced growing pains.
In November 2017, Caterpillar ended its investment in the company, though it remains a customer. The heavy equipment manufacturer took an early minority stake in Uptake and has been gathering data from its machinery using the startup's technology. About a month later, Chicago private equity firm Valor Equity Partners, which put $35 million into Uptake, also ended its investment.
The size of Uptake's workforce also has fluctuated. The company employed about 550 people as of mid-November, down from about 750 earlier this year.
