Corgi, the Y Combinator-backed insurance technology startup, became embroiled in another controversy earlier this week when Papermark, a maker of open source data room software, accused Corgi of stealing its software and passing it off as its own.
Corgi denies this, telling TechCrunch: “No Papermark code was used.”
But there were reasons why people believed the initial accusation, made by Marc co-founder of Papermark Seitz in Xabout Corgi’s newly launched product called Dataroom.
Seitz’s post blew up because he shared screenshots showing Corgi’s product using the same language for the same features as Papermark’s, word for word. Trading room software is essentially a secure exchange of documents. It is famously used by startups to introduce venture capitalists and send them support materials for due diligence.
Seitz went so far as to call Corgi’s new product a copyright and license infringement, and a “fraud.”
Corgi co-founder and CEO Nico Laqua saw the tweet and promised to investigate. Shortly after, he published in X his total denial with his own receipts, demonstrating that the code was different between the two products.
While he strongly rejected accusations of license violation (“’stole my business code’ is a different claim than ‘copied my style,’ Laqua argued), he admitted that relying on a vibration-coding design led to mirroring features.
“Looking back, we should have leaned more on our own language and visual choices rather than taking cues from existing products in the space, and that’s on us,” he posted.
A Corgi spokesperson confirmed to TechCrunch that the offending features were vibration-encoded and said they had already been changed, downplaying the situation.
“The issues were limited to visual elements on two peripheral settings pages,” the spokesperson told us, adding that these elements were “updated immediately” and that “our team confirmed that no Papermark code was used.”
Laqua and the spokesperson also accused Papermark of making these allegations because Corgi offers a less expensive product. “I understand this hurts, since we are launching something mostly free that competes with their SaaS. I would be angry too,” Laqua wrote about Seitz. (Seitz has not yet responded to our request for comment.)
However, it was clearly not just sour grapes when identical features and wording were used.
This is a new question: if vibe coding makes it so easy to copy the look and feel and every function of someone else’s work, without copying every line of the code itself, how much does it matter if the source is not identical?
Obviously, legally speaking, it is the only thing that matters. So this is not the same as the controversy over Y Combinator alum PearAI, a 2024 startup that admitted to cloning another open source project and publish it under your own license.
Morally speaking, this is ambiguous and will become increasingly common.
As a fellow YC and founder of Agent OS. open prose Daniel Barrett explained in X: “In a world where a robot can trivially copy 1:1 the structure of something even if the character-level code diverges… what makes one unacceptable and the other not? Existing intellectual property law, incidental to the old world? Isn’t there some greater principle at work here?”
Corgi is now aggressively trying to clean up any damage to its reputation. It has issued a cease and desist letter to Seitz demanding that he remove the tweet, the company confirmed to TechCrunch.
The founder of Hello World Cafe, which in some ways competes with Corgi’s cafe business, also competes in X who received a cease and desist letter from Corgi’s attorneys for his tweet that was joking about the Dataroom controversy. Although X still remembers it. There have been hundreds of comments and countless subtweets. (Corgi also offers a 24-hour cafe, and there are plans to open more, Laqua recently said in Harry Stebbings Podcast.)
This latest brouhaha adds to a growing list of conversations surrounding Corgi. The two-year-old startup, for example, has a growing reputation for being litigious. that’s it sued several former employees.
Laqua also recently went viral for his comments on Stebbings’ podcast about how he expects employees to work seven days a week. “I promise you that anything you can do in five days you will accomplish in six or seven days,” he said.
That, of course, is the fallacy of startup hustle culture. decades of the investigation concludes repeatedly that human productivity is not a quadratic equation. While sprints can be effective (and build camaraderie) for short-term problems like site downtime, research shows that, as a matter of routine, longer working hours reduce productivitynot the other way around.
The startup also sparked talk about how quickly it has raised money at ever-increasing valuations, even by AI startup standards. Last month, Corgi raised a $106 million Series B1, valuing the company at $2.6 billion, just three weeks later announcing a $160 million Series B at a $1.3 billion valuation and four months after its $108 million Series A.
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