Y Combinator-backed insurance technology startup Corgi found itself embroiled in another controversy earlier this week when Papermark, maker of open source data room software, accused Corgi of stealing its software and passing it off as its own.
Corgi denies it. “No code from Papermark was used,” the company told TechCrunch.
But there were reasons why people believed the original claim, made by Marc, co-founder of Papermark Seitzon and was about Corgi’s new product called Dataroom. Trading floor software is essentially secure document sharing. He is known by startups for pitching venture capital projects and sending them supporting documents for due diligence.
Seitz’s post blew up because he shared screenshots showing Corgi’s product using the same language for the same features as Papermark’s, word for word. He went so far as to call Corgi’s new product a copyright and licensing violation and a “fraud.”
Corgi co-founder and CEO Nico Laqua saw the tweet and promised to investigate. Shortly after, he answered the with total denial, showing that the code was different between the two products.
Although he vigorously pushed back against the license violation claims – arguing that “copying my style” is a different claim from “stealing company code” – he admitted that relying on a vibrational coding design led to the replica features.
“Looking back, we should have leaned more into our own language and visual choices instead of taking inspiration from existing products in the space, and that’s on us,” he posted.
A Corgi spokesperson confirmed to TechCrunch that the offending features were ambiance-coded and said they had already been changed, downplaying the situation.
“The issues were isolated to visual elements on two peripheral settings pages,” the spokesperson told us, adding that these elements were “immediately updated” and that “our team confirmed that no code from Papermark was used.”
Laqua and the spokesperson also accused Papermark of making the accusations because Corgi offers a cheaper product. “I understand that this stings since we are offering something largely free that competes with their SaaS. I would be angry too,” Laqua wrote of Seitz. Seitz did not respond to a request for comment.
However, copying identical visuals and feature language went beyond sour grapes as a credible complaint. This raises a new and thornier question: If ambience coding makes it so easy to copy the look, feel, and every function of someone else’s work, without copying every line of the code itself, what does it matter if the source isn’t identical?
Obviously, legally speaking, that’s the only thing that matters. So this is not the same as the controversy surrounding Y Combinator alumnus PearAI, a 2024 startup that admitted to having cloned another open source project and publish it under its own license.
Morally speaking, this is ambiguous and will become increasingly common.
As a YC Alumnus and Founder of Agent Operating System OpenProse Dan Barrett explained on: “In a world where a robot can trivially copy 1:1 the structure of something even if the character-level code diverges… what makes one unacceptable and the other not? Existing intellectual property law, incidental to the old world? Isn’t there a more important principle at work here?”
Corgi is now vigorously trying to repair any damage to its reputation. It sent a cease and desist letter to Seitz demanding that he delete the tweet, the company confirmed to TechCrunch. The founder of Hello World Cafe, which partly competes with Corgi’s cafe business, he also says received a ceasefire from Corgi’s lawyers following a tweet joking about the Dataroom controversy. Even if X still remembers it. There were hundreds of comments and countless subtweets.
This is not the first time Corgi has been accused of harsh legal tactics. In May, competitor Matcha accused the company of bullying behaviora dispute that ran alongside a separate lawsuit. The two-year-old startup also sued various former employees and developed a growing reputation for being litigious.
(Corgi also offers a 24-hour cafe, and plans to open more, Laqua recently told VC. Harry Stebbing Podcast.)
This latest brouhaha adds to a growing list of discussions surrounding Corgi. The start-up created two years ago, for example, has a growing reputation for being litigious. It’s already sued various former employees.
Laqua also recently went viral for his comments on Stebbings’ podcast about how he expects employees to work seven days a week. “Whatever you can do in five days, I promise you, you’ll get more done in six or seven days,” he said.
This is, of course, the fallacy of startup hustle culture. Decades of research repeatedly concludes that human productivity is not a quadratic equation. While sprints can be effective and build camaraderie for short-term issues like a site outage, research shows that, as a routine, more working hours reduces productivityand not the other way around.
The startup has also been talked about how quickly it has raised funds with growing valuations, even by AI startup standards. Last month, Corgi raised a $106 million Series B1, valuing the company at $2.6 billion, just three weeks after announcing a $160 million Series B at a valuation of $1.3 billion and four months after its $108 million Series A round.
Corgi also operates a 24-hour cafe and plans to open more, Laqua said on the Stebbings podcast.
When you purchase through links in our articles, we may earn a small commission. This does not affect our editorial independence.
