Santiago — The lawyers of the Latin American unicorn Merama, co-founded by Chileans Manuel José León and Domingo Cruzat, attended a Santiago court this week to file a lawsuit against the directors of startup Urbano Design, Víctor Vargas and Pablo Gutiérrez, for alleged fraud.
In conversation with Chilean media Pulso and DF MAS, Salvador Gallo, Merama’s legal director, said that the unicorn founded by the American Sujay Tyle struck up an alliance with Chilean firm Urbano in 2022, taking a 55%-stake in the company and initially paying some $8 million, before injecting an addition $5 million in late 2022 in a bid to boost the company’s sales.
In total, more than $13 million was pumped into Urbano, but the company allegedly does not have the funds for the payment of its liabilities, and which aroused the suspicion of the unicorn at the beginning of 2023.
Merama, a company dedicated to promoting e-commerce brands in Latin America, began to investigate Urbano, and found that Vargas allegedly made a “fraudulent sale” by hiding data on the financial health of his company before sealing the deal with Merama last year.
A company called Smart Trade SpA, which was linked to Gutiérrez, allegedly played a key role in the scheme, according to the whistleblowers.
The business model of Merama, based in Mexico and Brazil, consists of partnering with digital brands to which it injects capital, while allowing its team to remain in the company alongside the participation of the founders. Thus, it acquires a percentage stake, but retains the talent and experience of the staff.
It achieved unicorn status in December 2021 after extending a $220 million Series B investment round that was led by venture capitalists and private equity firms including SoftBank and Advent International.
Currently, the startup founded by Tyle has close to 30 partner brands. In addition to its headquarters, the company has operations in Argentina, Colombia, Chile, the United States and Peru.
Who is Victor Vargas, founder of Urbano?
Vargas, the CEO of Urbano Design, is a Chilean surgeon and currently resides in Miami, and his profile was posted on Endeavor Chile before the lawsuit was announced.
“For a person who did not study anything related to business and who comes from a totally opposite world such as medicine, it has not been easy. Every day is a challenge in which you learn something new. However, the effort has been worth it because today I lead a global company with a presence in seven countries,” Vargas said at an exhibition for entrepreneurs in southern Chile in 2015.
His company has been in the market for a decade, dedicated to creating fashion accessories for the technology sector. Its clients include several retail companies.
Vargas has yet to comment on the accusations.