Twilio Sued by Authy Founder Over Merger Compensation

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By Michael Greene

Twilio Inc. is facing a lawsuit from the founder of Authy Inc., who claims the cloud-based communications platform deprived him of millions of dollars in equity compensation after the companies’ 2015 merger ( Palacio v. Twilio Inc. , Del. Ch., No. 2017-0368, redacted complaint filed 5/17/17 ).

Authy’s Daniel Palacio said that when he sold his technology startup to San Francisco-based Twilio, the parties agreed that he would lead the company’s newly formed Authy subsidiary and would be entitled to additional equity pay if certain revenue thresholds were met.

Palacio, who was terminated from his position in December, alleged that within months of his employment, Twilio took steps to diminish his authority and hampered Authy’s ability to achieve the revenue thresholds.

Palacio’s redacted complaint was filed May 17 in the Delaware Chancery Court.

A Twilio representative didn’t immediately respond to a request for comment.

To contact the reporter on this story: Michael Greene in Washington at

To contact the editor responsible for this story: Yin Wilczek at

For More Information

The complaint is available at

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