EV subscription startup Canoo, co-founder sued for alleged harassment

Just weeks after Canoo took the wraps off of its electric vehicle, the Los Angeles-based startup and co-founder Stefan Krause has been accused of gender and marital discrimination, harassment, breach of contract, and wrongful termination in a lawsuit filed Tuesday.

The lawsuit, which was filed by Christina Krause, the company’s former head of communications and Stefan Krause’s wife, was first reported by The Verge.

A Canoo spokesperson said the company doesn’t comment on pending litigation.

The lawsuit filed in Los Angeles Superior Court makes a number of allegations against Stefan Krause and Canoo, including that Christina Krause was paid less than other founding members and not given the co-founder designation or the equity stake that often comes with that title despite being a founding employee. Much of the lawsuit focuses on Stefan Krause, who stepped away from the CEO role at Canoo in August for personal reasons. Stefan Krause filed for divorce from Christina Krause in July 2019.

Ulrich Kranz, originally the company’s CTO, has since taken over the day-to-day operations of Canoo. Stefan Krause remains at the company and is focused on fundraising, according to a spokesperson. His current title is chairman of the Advisory Board.

The lawsuit also reveals more details about Canoo — originally named Evelozcity — its investors and how it has scaled in a just a few years time.

Some of the nuggets that stood out, include its origin story and rapid growth. The company was founded in late 2017, after a meeting in Hong Kong with Pak Tam “David” Li and David Stern, who would become investors in Canoo, according to the lawsuit. Canoo has never revealed the names of its primary investors. Stern is a German entrepreneur who the lawsuit also lists as a friend of Stefan Krause. Stern is listed as a director to UK incubator Pitch@Palace and as consultant for Celestial Limited.

Li, Stern and Stefan Krause made a “gentlemen’s agreement” to start an EV company at the conclusion of the meeting and Christina Krause was tasked with securing talent and performing other administrative tasks related to the formation of a new company, the lawsuit says. The meeting with Li and Stern occurred around the same time that Stefan Krause left his job as CFO of the troubled company Faraday Future .

The company launched a month later, and by December it had 10 founding employees. Nine of those became co-founders. Christina Krause alleges in the lawsuit that she was the only one excluded from the founder designation status because her “role wasn’t critical for the building of the car.” She was also allegedly told that it would be “distasteful” for the wife of a co-founder to also receive the same designation and get an equity stake. 

By March 2018, just four months since its official formation, Canoo had more than 100 employees. That number spiked again to 200 by September, 300 by March 2019 and now reaches more than 400, according to the lawsuit.

As the company scaled, the relationship between Christina and Stefan Krause deteriorated. It hit a new low in March 2019 when Stefan Krause allegedly asked his wife to agree to a postnuptial agreement, which would presumably handle how shares of Canoo would be divided in the event of a divorce. The lawsuit alleges that Stefan Krause, Stern and Krantz pressured Christina Krause to sign the agreement.

Canoo has completed the design and engineering of its vehicle and is now preparing it for production through an unnamed contract manufacturer based in Michigan. The first cars are slated to appear on the road by 2021.