Albertsons sued for allegedly copying startup’s software

ALBERTSONS COS. was sued by an e-commerce software maker that claims the grocery chain conducted trials with its product for three years only to steal its trade secrets to build its own system.

The Seattle startup Replenium, Inc. said in the lawsuit that it entered into an agreement with Albertsons in 2020 to deploy software that lets online shoppers subscribe to have their frequently purchased items automatically replenished. Albertsons pledged to begin trials using the software in a limited number of locations and then roll out the service at more than 2,000 stores in more than 30 states, according to the lawsuit, filed on Monday in federal court in Seattle.

Replenium claims it negotiated in good faith with Albertsons, sharing details of its software so it could be integrated into the grocery chain’s systems and deployed nationally, with payments to Replenium based on revenue. But Albertsons abruptly ended the relationship in November, the startup alleges.

“Albertsons’ calculated maneuver cost Replenium millions of dollars that it invested in implementation and operation, tens of millions of dollars in anticipated revenue … and a massive loss in Replenium’s enterprise value,” the software company claims, saying the chain “acted in bad faith by repeatedly squeezing and ultimately discarding Replenium.”

Replenium accuses Albertsons of misappropriating trade secrets, breach of contract and unjust enrichment, and is seeking an unspecified monetary award to be determined at trial.

Through a spokesperson, Albertsons declined to comment on the suit.

Founded in 2015, Replenium has raised $18 million and has 22 employees, according to Pitchbook. Chief Executive Officer Tom Furphy previously worked for Amazon.com, Inc., as did Replenium Chief Technical Officer Umair Bashir.

Albertsons is the second-biggest grocery chain in the US. It is in a merger deal with Kroger Co. currently being scrutinized by regulators.

The case is Replenium, Inc. v. Albertsons Companies, Inc., 24-cv-01281, US District Court, Western District of Washington (Seattle). — Bloomberg News