Alphabets, Goldman Sachs are among other investors that filed a lawsuit against ad tech startup Outcome Health for allegedly misleading them in the run-up to a nearly $500 million. Outcome Health fired back at investors suing the firm, saying their accusations of fraud are baseless, according to Wall Street Journal,
The Chicago-based tech startup was sued by its top investors late yesterday. Goldman Sachs asked a judge to put a freeze on $225 million that was due to Shah and Agarwal as part of the fundraising. Once revered as a Chicago tech startup success story, the lawsuit is the beginning of mounting trouble for the 11-year old startup. Founded in 2006, Outcome Health (formerly ContextMedia) delivers health outcomes and impacts the human condition through technology. It operates a digital advertising network in doctors’ offices across the United States. The company has doubled each year in its scale of technology implementation at outpatient healthcare facilities, business partnerships with global life sciences and medical device.
In a letter to its customers, Outcome Health, founder and CEO, Rishi Shah, reassured them about the accuracy and transparency in it’s company system. “Over the last few weeks you’ve likely read our response to media coverage that I hope demonstrates our commitment to integrity, accuracy and transparency. We have systems in place that ensure you are receiving accurate, independently verified confirmation about the performance of your current campaigns. Any operational issues that existed in the past are being addressed and resolved; we have new people, processes, and systems in place and continue to strive for operational excellence,” Rishi Shah said.
Not knowing what the outcomes of the lawsuit will look like, Outcome Health has a long way to go to reassure its customers and investors.