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Triller faces third lawsuit in weeks, as app services partner sues Tiktok rival – Music Business Worldwide

September 29, 2022

Video-sharing social networking service Triller, the US-based challenger to TikTok, is facing another hurdle in its attempt to go public, this time via a lawsuit from its app services partner alleging non-payment.
Triller is being sued in a Los Angeles court by Germany’s Phiture, a consultancy company that helps apps grow by improving user experience.
The lawsuit, filed on August 31, alleges that Triller still owes the German company $132,686 for services under their agreement signed in March 2021.
Founded in 2016, Phiture has teams in Berlin and New York and offers five key services including app store optimization, performance marketing, user retention, subscription revenue optimization and growth consulting.
The agreement between Triller and Phiture includes a license to use the latter’s optimization client software that improves the placement of Triller’s app on the Google Play store and Apple’s App Store.
That service alone costs $14,000 per month.
Triller also used Phiture’s services for recommendations from March 15 to April 31, 2021 at $250 per hour, says the latter company.
On Sept. 30, 2021, Triller defaulted in its payments under their agreement despite demands made by Phiture, according to the lawsuit.
“Neither the whole or any part of the above sum has been paid although demand therefor has been made.”
Phiture
“Neither the whole or any part of the above sum has been paid although demand therefor has been made, and there is now due and payable from defendants,” the lawsuit reads.
The litigation marks the latest setback for Triller as it seeks to compete against video-sharing behemoth TikTok. It’s the third lawsuit filed against the company in less than a month.
Just last week (August 29), Triller was hit with a lawsuit from Sony Music Entertainment in the US for its alleged illegal use of Sony Music’s copyrighted sound recordings on the Triller platform.
“Triller’s failure and refusal to pay millions of dollars in contractual licensing fees that Triller agreed to pay for the use of Sony Music’s copyrighted content in Triller’s commercial service,” Sony Music said in its complaint.
A few weeks prior to the Sony lawsuit, Triller was also sued by superstar producers Timbaland and Swizz Beatz, seeking $28 million in missing payments from the acquisition of their song battle platform Verzuz in early 2021.
The pair launched the platform in March 2020 during lockdown on Instagram Live and went on to sign a partnership with Apple Music in July of that year before Triller offered to buy it in January 2021.
The same day that Triller was served with a lawsuit from Sony Music, the company disclosed that it “expects to become publicly traded on the Nasdaq… during the 4th quarter of this year.”
Triller in June called off its planned IPO via merger with video advertising software provider SeaChange International, which would have created a $5 billion company.
Just hours after scrapping the SeaChange merger, Triller decided to launch its own IPO, targeting an approval by the third quarter. At the time, Mahi de Silva, Triller’s Chief Executive Officer, said: “Triller has determined that the best course of action is a direct listing for Triller.” De Silva, Amplify.ai’s co-founder and CEO, was named Triller’s CEO in April.
“The Triller IPO will be the largest creator IPO in history,” the executive added.
However, mounting lawsuits are not attractive for IPO-bound firms like Triller, which has raised $300 million to date.
“The compliance bar for companies to go public is much higher than in previous years, so things like pending litigation and accounting irregularities need to be clean,” David Zilberman, partner at venture capital firm Comcast Ventures, was quoted by Inc. Magazine as saying in a 2014 article.
Triller, which counts Metallica and Snoop Dogg among its backers, confidentially filed for its direct IPO on the Nasdaq on June 30. New research co-authored by visiting Wharton finance professor Burcu Esmer in 2020 found that some firms use pre-IPO confidentiality to fend off lawsuits.
“One benefit of filing confidentially is that firms are able walk away without attracting public scrutiny… But relatively few firms change their minds after filing for an IPO and decide to stay private. So, there must be some other benefits related to filing confidentially,” Esmer said in the study published in March 2020.Music Business Worldwide
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