The former sales executive filed a lawsuit in California alleging “she was pushed out of the company because she raised concerns about illegal and unethical practices.”
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A former sales executive at the 3D digital home scanning company Matterport accused the company of wrongful termination and retaliation in a new lawsuit filed on Friday in a California courtroom.
Vinatha Kutagula said that her wrongful dismissal in March stemmed from internal complaints about how other members of Matterport’s sales and executive leadership teams reported the company’s sales and revenue.
“She was pushed out of the company because she raised concerns about illegal and unethical practices, business integrity, material risks to financial data, discriminatory behaviors by HR and sales leaders, and an overall toxic workplace,” Kutagula’s complaint reads.
Vinatha Kutagula
The company is in the process of being acquired by real estate giant CoStar in a $1.6 billion deal announced in April. Matterport is facing a handful of other lawsuits, including a stock-related dispute with its former CEO William Brown and others from shareholders objecting to the merger.
Matterport called the allegations made in the lawsuit “baseless.”
“Matterport is proud of its commitment to operating in an ethical, legal and inclusive manner,” according to a Matterport spokesperson. “The allegations in the complaint are baseless and Matterport looks forward to vindicating itself completely in court.”
According to her complaint, Kutagula was hired to run sales operations and customer service. She joined the executive leadership team in March 2023. During much of her time on the executive team, in which she was the only woman of color, Kutagula said she was “targeted,” “retaliated against” and “threatened” by other members of the sales and executive teams for voicing concerns about the company misrepresenting and using inaccurate data.
“Despite this targeting, she continued to flag unethical business practices and business integrity issues,” the complaint reads. “Ms. Kutagula partnered with the finance department to fix these issues.”
Kutagula alleged that in the third quarter of 2023, the sales team closed “the largest Matterport deal with negative margins,” which also “created and rolled out their own referral incentives for the largest deal for their personal gain.” Kutagula alleged that the deal represented a violation of federal law for publicly traded companies and that it “created a legal and financial risk to the company.”
She alleged that as recently as early this year, the company included “artificially inflated” metrics that misled investors and analysts. Kutagula said the alleged reporting practices would lead to weaker revenue in the second half of this year.
“In February 2024, Ms. Kutagula discovered that the Quarter 4 Net Dollar Retention (NDR) was inflated by adding Services and frontloading revenue for some of the largest deals,” the complaint reads.
“Internally, deal sizes, new logos, and Customer Acquisition Costs (CAC) were being misrepresented to Matterport employees and the Board of Directors,” Kutagula’s complaint said. “New logos used for CAC and internal/external reporting included small franchises or names from previous years.”
Kutagula said that Matterport was actively working to be acquired by CoStar by March 2024. She said she flagged the alleged reporting issues to Matterport CEO RJ Pittman that month.
“Despite knowing the compliance issues, the CEO told Ms. Kutagula to stop objecting and pushed for her to compromise” with the other executives in question, according to the complaint.
Around the same time, executives collected feedback from other employees who took issue with Kutagula’s leadership and communication style. Kutagula said the feedback was “an effort to push her out.”
She shared those concerns with Pittman on March 25, and she was fired within an hour, the complaint says.
Kutagula is seeking unspecified damages to be determined at a jury trial. Read the complaint below:
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