Zetwerk Says Ayr Energy's $1 Bn Complaint Is 'An Answer to a Case It Cannot Avoid'

After US-based power infrastructure startup Ayr Energy accused IPO bound Zetwerk of stealing its trade secrets and sought at least $1 Bn in damages, the Indian B2B manufacturing startup has dismissed the allegations, claiming the complaint is a counterattack to an earlier lawsuit it had already filed against Ayr.

In a statement shared with Outlook Business, Zetwerk said, "This complaint comes right after Ayr's own claim against manufacturing platform Zetwerk collapsed. It was withdrawn after it found no traction in a California court."

The company added that it had filed the first lawsuit in Texas in October 2025, seeking $100 Mn in damages, and claimed that Ayr's attempt to get that case dismissed was rejected by the court.

The response comes after Ayr Energy filed a complaint before the US International Trade Commission (ITC) and counterclaims in the Texas Business Court, accusing Zetwerk, Zetwerk Manufacturing USA, Unimacts Global and KRYFS Power Components of stealing its proprietary transformer technology to build a competing US business.

According to Ayr's filings, Zetwerk allegedly placed an operative at Ayr under false pretences to gain access to confidential information. The employee allegedly left after six weeks and later joined Zetwerk to lead its transformer business. Soon after, the company allegedly began offering custom transformer capabilities and used the AYR ENERGY brand name in its online advertising.

The filings accuse Zetwerk of trade secret misappropriation, false advertising, trademark infringement, fraud, unfair competition and other claims. Through the ITC complaint, Ayr has sought an exclusion order to block imports of the allegedly infringing transformers into the US. Separately, in Texas, it has sought damages of at least $1 Bn, along with exemplary damages, disgorgement, corrective advertising and injunctive relief.

Ayr's latest complaint mirrors several of the allegations that Zetwerk had levelled against the startup in its 2025 lawsuit, turning the dispute into a wider legal battle over trade secrets, employee movement and customer relationships in the US transformer market.

Rejecting the allegations, Zetwerk said, "The origin of this dispute is that Ayr's co-founder, Anirudh Reddy, incorporated the company while serving as a senior Zetwerk executive, then walked out with confidential Zetwerk documents. Our filings characterise this as plain theft."

The legal dispute comes at a crucial time for Zetwerk. Earlier this month, the manufacturing unicorn received SEBI's approval for its proposed IPO, taking it a step closer to its stock market debut. The company had confidentially filed its draft papers in March and is reportedly looking to raise about $450 Mn through a combination of a fresh issue and an offer-for-sale.

What Zetwerk Had Alleged Earlier

The dispute dates back to October 2025, when Zetwerk sued former executive Anirudh Reddy Edla, Ayr Energy and others in a Texas court, alleging trade secret misappropriation, breach of fiduciary duty and unfair competition.

Then, Zetwerk sought more than $100 Mn in damages and requested temporary and permanent injunctions restraining Ayr from using its confidential information.

According to Zetwork's petition, Ayr was incorporated while Edla was still employed at Zetwerk and was set up to compete directly in the renewable energy equipment market. The lawsuit alleged that Ayr onboarded Zetwerk's customers soon after launch and secured over $250 Mn in contracted orders, many of which allegedly came from Zetwerk's existing sales pipeline and customer relationships.

The petition also accused Ayr of recruiting multiple former Zetwerk and Unimacts employees, including Chad Stuckey, and alleged that the startup benefited from confidential information relating to Zetwerk's transformer business, resulting in tens of millions of dollars in lost business for the unicorn.

Founded in 2024, Mountain View-based Ayr manufactures transformers, switchgear and other critical power infrastructure equipment for utilities, renewable energy developers and industrial customers.

Zetwerk, founded in 2018, operates a global manufacturing and supply chain platform catering to industries such as energy, aerospace, defence, automotive and electronics. It has raised more than $700 Mn from investors including Peak XV Partners, Lightspeed and Mars Growth Capital.