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'Deliberate fraud': EVP's allegations against StrongRoom AI revealed

Newly released court documents for the first time detail why EVP made the extraordinary decision to call police on its own portfolio company.

Daniel Van Boom, Bronwen Clune and Laurel Henning
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StrongRoom AI co-founders Max Mito and Christopher Durre. StrongRoom AI.

Sydney VC firm EVP has accused StrongRoom AI of understating its debts and overstating its revenue and profitability before it invested in the startup.

Federal Court documents released on Thursday make public the reasons behind EVP's decision to call police on StrongRoom AI in the middle of March, less than two weeks after it announced an investment in the medtech startup.

EVP alleges that StrongRoom AI understated its debts by over $4 million and was losing $800,000 each month despite claiming to be profitable.

"EVP has now discovered that it was profoundly misled in connection with its investment in [StrongRoom AI]," the VC wrote in its Federal Court submission seeking an urgent freezing order, "and that the warranties given were false, misleading or deceptive conduct."