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Why Are Imgur, Genius, and Amino Suing This Startup?

Over the past 2018, Medialab has pair-built a sort of mini-media empire by purchasing underperforming apps and websites and cramming them chock-full of advertisements

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Over the past 2018, Medialab has pair-built a sort of mini-media empire by purchasing underperforming apps and websites and cramming them chock-full of advertisements. Among them, Genius, the database for song lyrics, Imgur, an image-sharing site, and a few others in total make an expected audience of 180 million monthly users, sending over 22 billion messages on its chat apps.

However, Medialab has also had to contend with many lawsuits. Those suing Medialab for what the article terms "alleged breaches of acquisition agreements" are the founders of Imgur, Genius, Amino, and Datpiff. That includes a claim from the founders of Amino that it breached a commitment to a $17.5 million payment agreement to their company. Meanwhile, Genius founder Tom Lehman accused the company of refusing to pay up for an $80 million sale in another still-ongoing case. Neither has yet been decided by the courts.

Medialab has settled lawsuits with Imgur and Datpiff. First, Imgur founder Alan Schaaf took a settlement in June 2023 over an $8 million payment dispute. Then there's Datpiff, which won a $400,000 judgment for itself in July 2021. Not to mention legal troubles due to its acquisition of Whisper, which included a class action settlement over exposed user data. Other Medialab acquisitions, like Kik, have been pilloried for issues child exploitation.

Moreover, financial disputes have also clouded the past of Medialab. It was reportedly involved in a lawsuit of $110 million against the Corbel Capital debt fund, which was settled just this past February. It has faced lawsuits from other suppliers, like Mixpanel and HTEC, over unpaid invoices.

Yet Medialab still managed to report north of $40 million in net profits in 2021 alone and went on to raise $200 million at a $1.1 billion valuation in that very year. Its acquisitive ways caught the attention of the likes of Kraft-Heinz, Remy Martin, and Starz as the cost of borrowing shot up manifold over the same period. Rather, it flags deeper issues of its hyper-aggressive growth and debt-balancing policies through court cases and financial troubles pummeled onto Medialab.

Author
James Bennett | Contributer