Lawsuit Filed by Alphonso's Co-founder Against Valuation Firm Kroll

In the rapidly growing connected TV (CTV) advertising sector, a lawsuit filed by co-founder Lampros Kalampoukas against risk and financial advisory services firm Kroll has shed light on the importance of accurate valuations. The lawsuit, filed in Manhattan Supreme Court in New York County, alleges that Kroll undervalued Alphonso, now rebranded as LG Ads, by nearly $100 million.

Alphonso, a startup specialising in advertising technology for smart TVs, provides a platform for advertisers to reach consumers on CTV operating systems. The company has been expanding its global reach through strategic partnerships and innovative advertising formats like screensaver ads.

The lawsuit accuses Kroll of professional misconduct for manipulating the valuation process to suppress Alphonso's value and allow LG Electronics to acquire shares at below-market prices. The lawsuit claims that for the second tender offer valuation issued on June 18, 2025, Kroll allegedly changed its methodology without explanation, using a narrower definition of cash contributions that excluded excess cash and other cash reserves.

Under the terms of the stockholders agreement, the price for each scheduled tender offer is determined through a specific process. If the valuations are more than 10% apart, a third valuation firm is selected to conduct its own valuation.

The relationship between LG Electronics and Alphonso's founding leadership deteriorated almost immediately after the acquisition in 2020. In 2023, the co-founders of Alphonso, including Kalampoukas, Raghu Kodige, and Ashish Chordia, sued LG Electronics twice for breach of contract and for orchestrating a boardroom coup to oust founder-aligned directors.

However, recent developments have seen LG Ads continuing to expand its business operations, with partnerships between LG Ads and companies like Viant to advance addressability in CTV, and joining Innovid's Harmony initiative to optimize CTV advertising.

Raghu Kodige was appointed as CEO of LG Ads in July 2021. The lawsuit seeks damages in amounts to be determined at trial, together with pre-judgment interest at the maximum rate allowable by law, reasonable costs and expenses incurred in the action, including counsel fees where applicable, declaratory relief stating that Kroll's June 18, 2025 valuation report does not reflect the Tender Fair Market Value of Alphonso, and violates generally accepted standards of practice, including the AICPA standards.

The resolution of these valuation disputes could set important precedents for how similar transactions are structured and valued in the future. The ongoing legal battles have not prevented LG Ads from continuing to grow and innovate in the CTV advertising sector.