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Sydney-headquartered fintech Tyro Payments (ASX: TYR) is challenging an affiliate of Canadian multinational Lightspeed Commerce for an alleged breach of obligations as its agent, after becoming aware it was marketing a rival product from the parent company to Tyro merchants.
Proceedings filed by Tyro in the Supreme Court of New South Wales allege that Kounta, a point of sale (POS) software company founded by Nick Cloete and acquired by Lightspeed for US$35.3 million ($54.7 million) in 2019, has recently started offering a competing 'Lightspeed Payments' payments service.
The legal action comes whilst Kounta is allegedly still Tyro’s agent under a contract between the parties as well as being an authorised representative under Tyro’s Australian financial services licence (AFS).
"Tyro has become aware that Kounta is marketing to Tyro merchants and encouraging them to adopt Lightspeed Payments as their payment solution, including through the imposition of new fees for merchants using a Lightspeed Group POS solution that do not adopt Lightspeed Payments," Tyro stated in a release to the ASX.
"Tyro considers that this conduct by Kounta directly breaches Kounta’s obligations to Tyro, including its contractual obligations as Tyro’s agent.
"Tyro has sought to resolve this matter commercially with Kounta but the parties have not been able to reach a resolution that is acceptable to Tyro."
The Australian company has sought orders to restrain Kounta from breaching its contractual non-solicitation obligations to Tyro which extend to September 2024, and for the agent to indemnify Tyro for all losses connected to any breach or non-performance of contractual obligations.
Tyro is also seeking damages and an equitable compensation or account of profits.
Business News Australia has reached out to Lightspeed for comment, but is yet to receive a response at the time of publication.
It has been an tumultuous couple of years for Tyro, having settled a class action in February over the failure of its merchant EFTPOS terminals in early 2021 that led to thousands of businesses losing their card payment capabilities.
Tyro's share price fell considerably after that disaster and has not yet traded anywhere near 2020 levels. In September 2022 a takeover bidding war began, starting with a consortium of private investors including MLC Investments which pitched to buy the company for $660 million, before also attracting interest from Westpac (ASX: WBC) and Potentia Capital.
Potentia lifted the bid for Tyro to $875 million but the board was not interested. Talks resumed in January 2023, but in May the suitor walked away after eight months of negotiations.
Tyro's market capitalisation has slumped somewhat to $724 million after takeover prospects drew to a close, but under the leadership of former National Australia Bank (ASX: NAB) exec Jon Davey as group CEO since October the fintech has reported strong growth.
Gross profit rose 30 per cent to $193.2 million in FY23, while earnings almost quadrupled to $42.3 million.
Tyro introduced a new operating model in April 2023 aimed at creating a leaner and more disciplined organisation, with a smaller and refreshed executive management team with Dominic White as chief product officer, Deanne Bannatyne as chief growth officer, and Adrian Perillo as CEO of Tyro Health - a vertical that Davey headed up when he joined the group in 2021.
Last week Davey was given the dual role of CEO and managing director, and he joined the board of directors on 1 September.
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