Sydney venture capital fund EVP has reportedly contacted police and is seeking to recoup the investment it made in StrongRoom AI, less than a fortnight after it announced leading a $17 million round into the Melbourne software startup.
The AFR reported that EVP had called in legal and forensic accounting experts and was warning investors in its Opportunities Fund that it was “pursuing all avenues to recover the investment” and would wear any costs.
Startup Daily covered news of the raise in early March, which valued the business at $70 million and was also backed by existing investors Artesian Venture Partners and InterValley Ventures.
At the time EVP investor Misha Saul, who was joining the board, said the StrongRoom AI was “well on its way to becoming a global category leader in pharmacy technology”.
In a statement to Startup Daily, an EVP spokesperson did not name the startup, but said that “at no stage did we have prior knowledge of the alleged activity, and since becoming aware we have proactively provided information to police and are working collaboratively with them as they investigate”. The issue that led to police investigating was not identified.
“EVP is deeply concerned about recent developments regarding one of its investment companies and we have taken immediate action, including notifying law enforcement and pursing all available avenues to recover the investment,” the statement said.
“While this situation is disappointing, it does not reflect the integrity of our broader investment strategy and we remain committed to making impactful and ethical investments.”
They added that the VC is now “conducting a thorough review of our due diligence processes to strengthen measures and safeguards and ensure we can continue to uphold the highest standards of responsible investing” to prevent a recurrence.
The medication management, patient engagement, and analytics software startup was founded in 2017 by university colleagues Max Mito, Christopher Durre and Kieran Start. StrongRoom was acquiring the healthcare loyalty program Member Benefits Australia with the funding.
StrongRoom’s software streamlines medication tracking, dosage management, and patient adherence and claimed to have more than 1,500 customers in Australia and the UK, including major pharmacy groups, with around $13 million in annualised revenue in 2024.
Prior to its $17m raise earlier this month, the business has secured $15m in government grants and venture investment from the likes of Kalytix Ventures, Intervalley Ventures, Tyson & Blake and BoabAI.
Startup Daily has contacted StrongRoom AI’s cofounders for comment but has yet to receive a response.
Trending
Daily startup news and insights, delivered to your inbox.