Lawsuits Allege This Startup Ripped Off Millions From Vendors. Andreessen Horowitz Backed The Former CEO’s New Company Anyway

Munjal Shah when he was CEO of Health IQ in 2017. At the time, the company promised it could broker better life insurance rates for the"health conscious."the firm was being “very rigorous about choosing how to pick our bets” in the generative AI space. That’s why Yoo and fellow partner Justin Larkin decided to lead aalong with General Catalyst in the digital health startup Hippocratic AI. It was a new company but a repeat founder for Andreessen: Munjal Shah.

As cofounder and CEO of Mountain View, California-based Health IQ, Shah presided over a company with mounting cash flow issues and debt obligations resulting in hundreds of layoffs and millions in unpaid invoices at the end of last year, according to lawsuits, interviews and documents obtained by. More than a dozen lawsuits allege Health IQ owes vendors over $17 million combined.

The vendors who claim they are owed millions of dollars – some of them small business owners – say it was infuriating to see Shah walk away from Health IQ and raise more venture capital. Dave Maman, the CEO of North Carolina-based WeCall, toldthat Health IQ owes his 16-person company some $2 million in unpaid invoices.

The lead is passed to a call center and army of sales agents. And for every plan Health IQ sold, the company expected more than $1,300 in commission revenue, according to estimates reviewed byInterviews with six former vendors – including several who haven’t filed lawsuits – describe Health IQ employees pushing them for more and more calls throughout the open enrollment period in 2022, racking up millions of dollars in invoices.

An amended complaint filed by Quote Velocity in California Superior Court in Santa Clara County on May 1 alleges Health IQ owes nearly $7 million, and accuses the company of intentional misrepresentation and fraud. Shah, Suri and Vishal Parikh, who’s also a cofounder of Health IQ and Hippocratic AI, are listed as defendants.

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Lawsuits Allege This Startup Ripped Off Millions From Vendors. Andreessen Horowitz Backed The Former CEO’s New Company AnywayThe venture firm made a repeat investment in Munjal Shah, but his previous company Health IQ is facing allegations of millions in unpaid invoices and one lawsuit is alleging fraud.
Source: Forbes - 🏆 394. / 53 Read more »