Investors took restaurant technology startups out to lunch with monster nine-figure funding rounds. The Wall Street Journal investigation into Care.com leads investors to sue in Boston. MIT kicks Huawei and ZTE to the curb. Read these and more in this week’s Boston tech news:
—MIT cut ties with Chinese technology giant Huawei and ZTE “due to federal investigations regarding violations of sanction restrictions,” the university’s head of research wrote in a memo to her colleagues this week. The memo outlines a new review process for “elevated risk” proposals for international collaborations. Engagements with China, Russia, and Saudi Arabia were deemed as meriting additional faculty and administrative review. “It is designed to enable MIT to engage with the world effectively, with responsible management of risks and in keeping with the values of our community,” Vice President of Research Maria Zuber and Associate Provost Richard Lester wrote in the letter. The MIT Media Lab lists Huawei as a “Consortium Lab Member,” and the Sloan School of Business’s Center for Information Systems Research lists Huawei as a “Research Patron.” It’s not clear if ZTE has existing partnerships at MIT. The university has not responded to requests for a listing of its partnerships with both companies.
—An investor in Waltham, MA-based Care.com (NYSE: CRCM) has filed a class action lawsuit against the childcare marketplace, accusing the company of making false and misleading claims about the screening of care providers against databases and criminal records. The suit names the company, its founder and CEO Sheila Lirio Marcelo, and CFO Michael Echenberg. The Wall Street Journal in early March published a story that revealed caregivers with police records were hired on Care.com, and the company’s stock plunged. In the last week, the Journal reported day-care centers listed as being state-licensed did not appear to be actually certified, and Care.com also scrubbed tens of thousands of unverified centers from the website shortly before the Journal’s story was published. Again, the stock fell after the report. The plaintiff in the lawsuit is requesting damages for the class of investors because they relied on the misleading statements when they placed their bets on the company.
Care.com says the claims in the lawsuit are “are without merit” and said it intends “to vigorously defend the Company against them. As the lawsuit is a matter of public record and active litigation, we will not comment further.”Read Complete Article