A New SaaS Battle: Accel-backed BrowserStack versus Sequoia-backed LambdaTest

• ByStartupStory     |    September 2, 2022

On a Monday morning in April, K, a 27-year-old employee of the web and app testing platform BrowserStack, received a call from a competitor, LambdaTest. LambdaTest, a cross-browser testing platform, presented him with a job offer that was near twice his current wage. This was not a one-time occurrence. Since the beginning of January 2022, LambdaTest has actively courted at least 60 BrowserStack employees with generous offers. Some were approached via staffing services like LinkedIn, others via reference relationships, and still others directly from Lambda’s CEO.

A source who spoke on the condition of anonymity stated that he was a newcomer who had been with BrowserStack for three years. “I was contacted by LambdaTest through LinkedIn, and the offer seemed appealing.” “However, something didn’t feel right when I spoke with the reporting manager at Lambda,” he stated. “I was informed that I should replicate and produce equivalent tools to the same product (core IP of public mobile cloud infrastructure) that BrowserStack is developing right now.” I was also urged to disclose information about planned projects.”

Most BrowserStack employees rejected the offer because they thought it was unethical and believed it would result in a lawsuit. Approximately 78 employees joined the competitor firm. While there may be some overlap in the solutions offered, being forced to design and replicate the same developer and testing tools that one worked on at a previous job is unusual in the SaaS business, according to multiple people familiar with the situation, including product engineers.

“While there may be some overlap in the solutions we provide, a Khatabook (accounting software firm) will not ask a Tally employee to produce the same product for Khatabook… “It’s like stealing a company’s intellectual property (IP),” one employee who turned down Lambda’s offer explained. According to another member of BrowserStack’s sales team, employees were asked to “attempt to gather some client details” when joining Lambda.

“It is quite easy to find large clients, and those accounts are not difficult to find.” “The problem is discovering SMBs, which requires substantial research as well as dedicated teams and budgets,” said a BrowserStack executive who declined to name the businesses who have now joined Lambda. According to BrowserStack executives, at least 10 SMB clients from smaller portions of the US switched to Lambda around the time these offers were made, resulting in a minor (less than 1%) reduction in revenue.

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