IPO-Bound Zetwerk Sued By Ayr Energy In US, Seeks $1 Bn Damages Claim

Months after Zetwerk accused Ayr Energy and its founder of using stolen confidential information to build a rival business, the US-based transformer startup has hit back with legal claims of its own.

Ayr Energy has accused Zetwerk of trade secret theft, trademark infringement and false advertising. It is seeking at least $1 Bn in damages and a ban on the import of the allegedly infringing transformers into the US.

Responding to the complaint, Zetwerk said Ayr filed the latest action after withdrawing an earlier claim in California.

“This complaint comes right after Ayr’s own claim against the manufacturing platform Zetwerk collapsed. It was withdrawn after it found no traction in a California court,” the unicorn said.

Zetwerk said it had first sued Ayr in Texas in October 2025, seeking $100 Mn in damages. The court had rejected Ayr’s attempt to dismiss the case.

It further alleged that Ayr cofounder Anirudh Reddy incorporated the startup while serving as a senior Zetwerk executive and later left with confidential documents.

“Our filings characterise this as plain theft,” Zetwerk said. Calling the latest complaint Ayr’s response to an ongoing case, Zetwerk added, “We will prove these allegations in court.”

Ayr’s Allegations Against Zetwerk

Ayr filed a complaint before the United States International Trade Commission (USITC) and counterclaims in a Texas court against Zetwerk Manufacturing Businesses Pvt Ltd and three of its affiliates.

The proceedings name Zetwerk Manufacturing USA Inc, Unimacts Global LLC and KRYFS Power Components Ltd, besides its Indian parent entity.

According to Ayr’s filings, Zetwerk allegedly sent an employee to join the startup under false pretenses and access confidential information about its transformer business. Ayr claimed the employee accessed proprietary data without authorisation, left after six weeks and later joined Zetwerk to head a new transformer delivery business.

Ayr also alleged that Zetwerk began advertising custom transformer capabilities it did not previously possess and used the Ayr Energy name in online advertisements.

The filings accuse Zetwerk of trade secret theft, false advertising, trademark infringement, fraud, unfair competition and participation in a breach of fiduciary duty. 

Ayr has asked the USITC to investigate the matter and block import, marketing and sale of the disputed transformers. In its Texas counterclaims, it has sought at least $1 Bn in damages.

The action has widened the dispute between the two startups which compete in parts of the US power equipment market.

Founded in 2024, Ayr supplies transformers, switchgear and circuit breakers to utilities, renewable energy developers and industrial customers. Zetwerk, founded in 2018, offers manufacturing services catering to the energy, industrial manufacturing, aerospace, defence, automotive and electronics industries. 

Earlier this month, Zetwerk received SEBI’s approval for its proposed IPO, taking it a step closer to its stock market debut. 

Zetwerk filed confidentially for a public listing in India in March. Its IPO would reportedly comprise a fresh issue of $300 Mn and an offer-for-sale (OFS) component of shares worth up to $150 Mn.

The startup has raised over $700 Mn in funding till date and counts Peak XV Partners, Lightspeed, Mars Growth Capital, among others, as its backers.

Zetwerk’s Lawsuit Against Ayr

The lawsuit comes after Zetwerk Manufacturing USA and Unimacts Global sued Ayr Energy and its founder Reddy in a Texas court in October 2025.

Zetwerk alleged that Reddy set up Ayr while still working as a senior executive at the unicorn and used confidential information to build the business. It accused Ayr of trade secret misappropriation, breach of fiduciary duty and unfair competition.

According to Zetwerk’s court filings, Reddy incorporated Ayr about four months prior to resigning from Zetwerk in January 2025. In the months before leaving, he allegedly downloaded customer lists, pricing models among other strategic documents.

Zetwerk claimed that Ayr later used this information to win contracts from customers in its sales pipeline. It estimated a loss of nearly $77 Mn and alleged that Ayr’s gains could exceed $100 Mn.

The lawsuit also accused Ayr of hiring key employees, including former Unimacts executive Chad Stuckey, who allegedly carried confidential information and business relationships to the new startup.

Ayr has now made similar allegations against Zetwerk, turning the dispute into a wider battle over customer data, employee movement and business secrets in the US transformer market.

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