EVP has taken legal action against Melbourne startup StrongRoom AI and its founders, seeking to recover the $10.44 million it invested in the company. The Sydney-based venture capital firm was granted an urgent order by the Federal Court of Australia on Monday to freeze assets worth up to $10.44 million against 13 defendants. The defendants include StrongRoom AI, its recently appointed administrators and receivers, and five board members, including co-founders Max Mito and Christopher Durre.
The freezing order covers properties in Melbourne, an ANZ bank account in StrongRoom’s name, and any funds controlled by the administrators or receivers. The defendants are required to disclose their assets and any funds received from StrongRoom after specific dates, unless such disclosure may indicate wrongdoing. They must also reveal any on-distribution or payment to third parties related to the investment sum paid by EVP.
Misha Saul, head of EVP’s Opportunities Fund, joined StrongRoom’s board on February 26. The legal action follows the StrongRoom AI board’s decision to place the startup in administration due to potential insolvency. HLB Mann, a Sydney accounting firm, was appointed as the voluntary administrator to assess the business and potentially open expressions of interest for its sale.
evp pursues StrongRoom AI in court
The firm stated that the decision was driven by recent funding uncertainties and not operational issues. The conflict escalated soon after StrongRoom’s valuation at $70 million, with EVP revealing potential serious issues and warning investors of its fund about their pursuit to recover the investment.
Both EVP and Victorian police have declined further comments, citing ongoing investigations and privacy reasons. Founded in Melbourne in 2017 by university colleagues Mito, Durre, and Kieran Start, StrongRoom AI specializes in software for medication tracking, dosage management, and patient adherence. By the end of 2024, the company claimed $13 million in annual revenue with more than 1,500 customers, including pharmacies in Australia and the UK.
Other investors in StrongRoom AI include Artesian Venture Partners, Kalytix, and InterValley Ventures. However, EVP’s shareholding was not found in the records as of late March. Justice Derrington has also approved payments to the administrators and receivers for their work amid the ongoing legal proceedings.
The defendants were to be served notice of the freezing orders and the allegations by EVP’s affidavit by Monday evening. The matter is scheduled for a hearing on Thursday, April 3, in the Federal Court in Brisbane.
Photo by; Sebastian Pichler on Unsplash
