A UK investor with close ties to one of the defendants in legal action against besieged medtech startup StrongRoom AI has come out swinging against Sydney VC EVP, which is fighting to get its $10.4 million investment back.
Aaron Michelin, a director of Tyson & Blake – named after founder Chris Tornblom’s dogs – has flagged potential legal action against EVP, which backed StrongRoom with $10.4 million in February, leading a $17 million raise for the eight-year-old medicines management startup.
Just 10 days after the raise at a $70m valuation was announced on March 14, EVP had called financial investigators and the police over a still undisclosed “potentially serious issue”. The VC asked for its investment back but was refused. By the end of the week, Strongroom’s lender Paddington Street Finance, called in receivers to take control of the company’s banking assets last Friday and the board placed the startup in voluntary administration.
On Monday afternoon EVP’s Opportunities fund and investor Misha Saul launched Federal Court legal to freeze assets worth up to $10,440,969 million against 13 defendants, including the company, its administrators, receivers, and five board members, including cofounders Max Mito and Christopher Durre, and UK-based Peter Bruce-Clark, an investor and StrongRoom’s global president.
The freezing order was granted and the matter was adjourned until Thursday.
Bruce-Clark is also listed as a strategic partner to Tyson & Blake.
Michelin sent Australian media an open letter on Monday night accusing EVP of a “public scapegoating campaign, targeting the CEO in an unprecedented and damaging manner” rather than “assuming responsibility for their due diligence decisions”.
Selfish thinking
He accused EVP of failing to notify or engage with other shareholders, which he viewed as violating the signed shareholder agreement.
“This agreement is not a mere formality—it is a binding contract that underpins the trust and cooperation necessary in venture investing,” Michelin said.
“If EVP had concerns post-closing, the professional path would have been to convene shareholders, discuss remedies, and, if warranted, negotiate adjustments or management changes.
“To engage the media and authorities after closing the investment and transferring funds—without first exhausting shareholder dialogue—demonstrates a very narrow and quite selfish thinking.”
The European angel fund investor said StrongRoom AI was “one of the most promising companies we discovered”. Its software for medication management helps pharmacists document prescriptions, sign off on medications and record and manage transactions.
Tyson & Blake led a Seed round in January 2022 and followed up six months later with additional funding. StrongRoom was cofounded by Durre, Kieran Start and Mito in 2017 in a Melbourne garage. They’d been at University of Melbourne together and in 2020, took part in the MAP accelerator program as well as being in the first cohort of Boab AI’s artificial intelligence scale-up program. Boab, an Artesian Ventures subsidiary, is an investors alongside Artesian, which is backed by super fund Hostplus, Bruce-Clark’s Kalytix and InterValley Ventures.
StrongRoom had raised $15m by the time Forbes Asia named its cofounders on its 30 under 30 list last year.
Michelin said that while there was a possibility of accounting irregularities or reporting errors, there is no indication from on available information of fraudulent intent. He compared what’s occurred to the “shark strategy” of an aggressive VC wanting a discounting after discovering something during due diligence (DD), “but I have never heard that it would happen after you sign and pay”.
“It is my understanding that EVP conducted its own financial DD rather than using third-party auditors, despite Strongroom not having had an external auditor at the time,” he said.
Last week when news of the dispute broke, EVP issued a statement saying it was “conducting a thorough review of our due diligence processes to strengthen measures and safeguards”.
Michelin said the stand behind Strongroom and remain committed to helping the company recover and grow, warning of “legal scrutiny” for EVP unless the dispute “is resolved professionally and collaboratively”.
“Unless evidence of massive outright fraud is uncovered, EVP’s actions open them to potential legal consequences for the financial and reputational damage inflicted on the company and co-investors,” he said
“We have initiated discussions with other shareholders and legal counsel to evaluate the next steps.”
Michelin said that they are open to solving the potential issues raised by EVP.
“If there have been mistakes made, we are prepared to help the company correct them and mature,” he said.
“This is the investor’s role—to build, not to destroy.”
StrongRoom AI has more than 70 shareholders on its cap table, spanning Japan, the US and UK, Australia and New Zealand, Sweden and Singapore, with the most recent issue involving around $5.5 million Series A preference shares at $4.44.
Also at stake is $32 million worth of funding from several investors as a battle between EVP, the startup and five directors, as well as the administrator, and lender, gets underway in court later this week.
EVP was approached for comment but declined.
The VC is reportedly going ahead with a capital call for its $40 million Opportunities Fund, which has already backed Deputy and Mutinex before putting a quarter of the fund into StrongRoom AI.
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