Zymergen Investors Advance Class Suit Against Venture Funds (1)

SoftBank Group Corp. units and two other venture capital funds must face Zymergen Inc. investors’ claims that they are responsible for misleading IPO papers before the biological manufacturing company imploded, a federal court ruled.

The investors adequately alleged that SoftBank’s SB Investment Advisers (US) Inc., DCVC Management Co., and True Venture Management LLC—and their funds that invested in Zymergen—controlled the company in the lead-up to its initial public offering, Judge P. Casey Pitts said Wednesday for the US District Court for the Northern District of California.

Zymergen’s registration statement estimated a $1.2 trillion opportunity across 20 industries, the investors say. ...