Founder alleges that YC-backed fintech startup is ‘copy-and-pasting’ its business

A new startup lifting elements of competing businesses is far from unusual in today’s venture world, but sometimes competing founders don’t find the imitation all that flattering.

Andy Bromberg, CEO of the a16z-backed startup Eco, is claiming that Pebble, another fintech startup that came out of stealth this morning, “plagiarized” Eco’s materials and business model. Bromberg posted a Twitter thread this afternoon saying Pebble engaged in “copy-and-pasting, immaturity, lying, and espionage.” In the thread, Bromberg detailed the background behind his claims, and he also spoke to TechCrunch about the allegations.

Bromberg claims the Pebble co-founders, CEO Aaron Bai and CTO Sahil Phadnis, impersonated Y Combinator investors to get access to Eco’s waitlist. He also alleges that Phadnis asked detailed questions about Eco’s backend under the guise of looking for employment and that multiple aspects of Pebble’s product and marketing language are essentially copy-pasted from Eco.

TechCrunch covered the news earlier today that Pebble, which participated in Y Combinator’s Winter 2022 cohort, raised $6.2 million in seed funding from YC itself alongside LightShed Ventures, Eniac Ventures, Global Founders Capital, Montage Ventures, Soma Capital and angel investors.

On its website, Pebble, founded last year, calls itself “the first app that pays you to save, spend, and send your money — all in one balance.” It launched with two core products — a 5% APY interest offering for customer cash deposits, and a 5% cash back offering when customers spend at its partner merchants, which include Uber, Amazon and Chipotle, Pebble CEO Aaron Bai said. The former product is based on the model of taking in customer funds, converting them to stablecoins, and lending them out to institutions, Bai explained at the time.

Bromberg subsequently told TechCrunch that both core products were based on two of Eco’s core offerings. Eco describes itself on its website as “one simple balance that lets you spend, send, save and make money.” Eco, which was founded in 2018 and has raised over $95 million from investors, including Activant Capital, L Catterton, Lightspeed Venture Partners and to a16z, to date, has been offering up to 5% yields on customer deposits and 5% cash back through its app since inception, TechCrunch reported last March. Bromberg said that while its yield product has temporarily paused lending stablecoins due to current market conditions, its offering has historically been based on doing just that.

“It’s just gotten so egregious at this point that we feel the need to call it out and point out that, everyone at the end of the day, everyone takes inspiration from other companies. We’re all standing on the shoulders of giants, and all of that’s true, but at some point, it’s just unconscionable to copy so brazenly. And if they want to talk, I’m super happy to talk to them. But I don’t really feel like going and reaching out to them in advance of making some public statements at this juncture,” Bromberg told TechCrunch in a phone interview.

Bromberg’s Twitter thread includes alleged screenshots of internal customer records, which he says show multiple attempts on behalf of the Pebble co-founders to gain access to Eco. Bromberg told TechCrunch that Eco was able to link these submissions to Bai and Phadnis because they were “repeated submissions with overlapping information,” such as the same phone number and email being used numerous times under different names, including Bromberg’s own name as well as “Andy Bro Burger” and “Poopy Bromberg.”

Bromberg also alleges that while Eco was onboarding Phadnis as a beta customer, Phadnis inquired in detail about Eco’s costs and technology, saying he was a computer science geek interested in backend operations. Bromberg attached what he says are screenshots of conversation transcripts with Phadnis, who was a student at UC Berkeley at the time, asking if Eco was offering internships and saying he was considering applying for a job at Eco. Those conversations, Bromberg claims, took place in September 2021 — two months after Phadnis launched Pebble.

Using the phone number Eco originally had on file for Phadnis, Bromberg says, Phadnis started an account under the name “Sam Johnson” and submitted what Eco’s systems detected to be fraudulent identity documentation.

Bromberg listed in one tweet the various components of Eco’s business he claims Pebble copied:

“Investors got duped by copycats who can’t create anything on their own. I don’t think investors knew those ideas and words weren’t original,” Bromberg added in the thread.

Bromberg’s thread encouraged Bai and Phadnis to reach out to Bromberg directly. When TechCrunch first reached out to Pebble for comment on the matter this afternoon, Bai said he was in the process of trying to make contact with Bromberg and declined to comment further on the matter in the meantime.

The two parties have since connected, both confirmed to TechCrunch thereafter. Bai and Phadnis called the conversation a matter of “difference of opinion,” describing it as “respectful.” They said they view Eco as a competitor similar to how Uber and Lyft compete for business. Phadnis confirmed to TechCrunch that he did create multiple accounts under aliases to try to gain access to Eco’s platform, saying that he did so in an attempt to assess Eco’s know-your-customer (KYC) onboarding process from the perspective of a new fintech founder looking to gain insight on solutions other startups were using.

Bromberg told TechCrunch after the conversation that he was glad the Pebble co-founders reached out but that the opinions he expressed in his Twitter thread have not changed as a result of connecting with them.

Bromberg told TechCrunch that Eco has no plans of pursuing legal action against Pebble at this time.

This article was updated at 5:58pm EDT on May 23 to reflect that Bai and Phadnis had a phone call with Bromberg after Bromberg posted the Twitter thread. Both provided additional comments to TechCrunch following the call, which are now reflected in the article.