Forever 21 owner Authentic Brands Group (ABG) is suing Bolt Financial, accusing the payments startup of failing to deliver on its technology and costing ABG $150 million in sales.
As Bloomberg reported Tuesday (April 26), the suit also claims Bolt raised funding at increasingly high valuations by “consistently overstating” the nature of its integration with ABG’s brands to inflate its number of customers and gain more investments.
“Bolt has utterly failed to deliver on the technological capabilities that it held itself out as possessing,” ABG said in the lawsuit, calling the integration with Forever 21’s mobile app “disastrous” and alleging that it led to significantly fewer purchases.
Because of the glitches, just two of ABG’s more than 50 brands — Forever 21 and Lucky — are using the software, the suit claims.
Bolt responded in its own filing and said the ABG suit is without merit, calling it a “transparent attempt” at negotiating its agreement with Bolt.
The startup went on to say that any “alleged implementation issues” do not show evidence of a failure of Bolt’s technology, and that ABG’s suit does not show “anything more than typical technical issues that arise while implementing a product like this, let alone that Bolt failed to solve them where technically practicable.”
The report noted that because Bolt relies on having a vast consumer network, these allegations make things uncertain for the startup, which was most recently valued at $11 billion. The case is due to go to court in October.
Earlier this month, Bolt announced it was purchasing crypto startup Wyre Payments in a deal worth reportedly worth roughly $1.5 billion.
See also: Bolt to Purchase Crypto Startup Wyre for $1.5B
“By joining forces, Bolt and Wyre will build commerce solutions for mainstream, secure cryptocurrency usage for millions of shoppers, retailers, and developers,” the companies said in a news release at the time.
The sale is set to close sometime this year and will see Wyre help Bolt develop its application programming interface (API) offering by integrating its crypto stack. The two firms said this will let developers “use the top blockchain protocols to build financial products that can scale to millions of users across the globe quickly and securely.”
Read more: Bolt CEO Breslow Steps Down
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